Powell speech: Policy adjustments will support labor market

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Fed Nouvelles

Centralbanks

Federal Reserve Chairman Jerome Powell explains the decision to cut the policy rate, federal funds rate, by 50 basis points to the range of 4.75%-5% after the September meeting and responds to questions in the post-meeting press conference.

Key quotes Labor market bears close watching. But we think policy adjustments will support the labor market. Retail sales data, Q2 GDP indicates economy growing at solid pace. We are not seeing rising layoffs from our business contacts. We are not waiting for that. Our policy is still restrictive. We don't think we need to see further loosening of labor market to get inflation down to 2%. Unemployment rate is still a healthy level.

When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. How often does the Fed hold monetary policy meetings? The Federal Reserve holds eight policy meetings a year, where the Federal Open Market Committee assesses economic conditions and makes monetary policy decisions.

 

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