Tran of Chair Powell’s Press Conference

（鲍威尔主席新闻发布会文字实录）

CHAIR POWELL. Good afternoon.  My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people.  The economy is strong overall and has made significant progress toward our goals over the past two years.  The labor market has cooled from its formerly overheated state and remains solid.  Inflation has eased substantially from a peak of 7 percent to 2.1 percent as of September.  We are committed to maintaining our economy’s strength by supporting maximum employment and returning inflation to our 2 percent goal.

主席鲍威尔。下午好。我和我的同事们仍然专注于实现我们的双重任务目标，即最大限度地提高就业率和稳定物价以造福美国人民。总体而言，经济强劲，并在过去两年中朝着我们的目标取得了重大进展。劳动力市场已从以前过热的状态中降温，并稳固。通货膨胀率从7%的高峰大幅降至9月份的2.1%。我们致力于通过支持最大限度的就业和将通货率恢复到2%的目标来保持经济的强劲。

Today, the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by 1/4 percentage point.  We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained,with inflation moving sustainably down to 2 percent.  We also decided to continue to reduce our securities holdings.  I will have more to say about monetary policy after briefly reviewing economic developments.

今天，联邦公开市场委员会决定通过将我们的政策利率降低四分之一个百分点来进一步减少政策限制的程度。我们仍然通过适当调整我们的政策立场，可以在经济和劳动力市场保持强劲的同时，将通货膨胀率持续降低到2%。我们还决定继续我们的证券持有量。在简要回顾经济形势后，我将更多地谈谈货币政策。

Recent indicators suggest that economic activity has continued to expand at a solid pace. GDP rose at an annual rate of 2.8 percent in the third quarter, about the same pace as in the second quarter.  Growth of consumer spending has remained resilient, and investment in equipment and intangibles has strengthened.  In contrast, activity in the housing sector has been weak.Overall, improving supply conditions have supported the strong performance of the U.S. economy over the past year.

近期指标显示，经济活动继续以稳健的速度扩张。第三季度国内生产总值（GDP）按年率计算增长了2.8与第二季度的增长速度大致相同。消费者支出的增长依然强劲，设备和无形资产的投资有所增加。相比之下，房地产市场的活动则较为疲软。总体而言，供应条件的改善在过去一年里支持了美国经济的强劲表现。

In the labor market, conditions remain solid.  Payroll job gains have slowed from earlier in the year, averaging 104 thousand per month over the past three months.  This figure would have been somewhat higher were it not for the effects of labor strikes and hurricanes on employment in October.  Regarding the hurricanes, let me extend our sympathies to all the families, businesses, and communities who have been harmed by these devastating storms.  The unemployment rate is notably higher than it was a year ago, but has edged down over the past three months and remains low at 4.1 percent in October.  Nominal wage growth has eased over the past year, and the jobs-to-workers gap has narrowed.  Overall, a broad set of indicators suggests that conditions in the labor market are now less tight than just before the pandemic in 2019.  The labor market is not a source of significant inflationary pressures.

在劳动力市场方面，情况依然稳固。与今年早些时候相比，就业增长有所放缓，过去三个月平均每月新增10.4万人。如果不是因为罢工和飓风对10月就业的影响，这一数字还会更高。关于飓风，我想对所有这些毁灭性风暴伤害的家庭、企业和社区表示同情。失业率明显高于一年前，但在过去三个月有所下降，10月仍保持在41%的较低水平。名义工资增长在过去一年有所放缓，职位空缺与求职者之间的差距有所缩小。总体来看，一系列广泛的指标表明目前劳动力市场的紧张程度比2019年疫情前有所缓解。劳动力市场并不是显著的通胀压力来源。

Inflation has eased significantly over the past two years.  Total PCE prices rose 2.1 percent over the 12 months ending in September; excluding the volatile food and energy categories, core PCE prices rose 2.7 percent.  Overall, inflation has moved much closer to our 2 percent longer-run goal, but core inflation remains somewhat elevated.Longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets.

过去两年里，通货膨胀显著放缓。截至9月份的12个月里，总体个人消费支出价格上升了2.%；不包括波动较大的食品和能源类别，核心个人消费支出价格上升了2.7%。总体而言，通货膨胀率更接近2%的长期目标，但核心通货膨胀率仍有些高。长期通胀预期似乎仍然牢牢锚定，这反映在对家庭、企业和者的广泛调查以及金融市场指标中。

Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people.  We see the risks to achieving our employment and inflation goals as being roughly in balance, and we are attentive to the risks to both sides of our mandate.

我们的货币政策行动旨在促进美国人民的最大就业和稳定物价。 我们认为实现就业和通胀目标的风险大致平衡，并且我们对双重的双方风险都保持关注。

At today’s meeting the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point, to 4-1/2 to 4-3/4 percent.  This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move toward a more neutral stance over time.

在今天的会议上，委员会决定将联邦基金利率的目标区间下调25个基点，至4.50%-4.7%。这一进一步调整我们的政策立场将有助于保持经济和劳动力市场的强劲，并将在我们逐步迈向更中性的立场时继续推动通胀的进一步进展.

We know that reducing policy restraint too quickly could hinder progress on inflation. At the same time, reducing policy restraint too slowly could unduly weaken economic activity and employment. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. We are not on any preset course.  We will continue to make our decisions meeting by meeting.

我们知道，过快地减少政策约束可能会阻碍通胀方面的进展。同时，过慢地减少政策约束可能会不必要地削弱经济和就业。在考虑对联邦基金利率目标范围进行额外调整时，委员会将仔细评估传入的数据、不断变化的前景以及风险平衡。没有任何预设的路径。我们将继续逐次会议做出决定。

As the economy evolves, monetary policy will adjust in order to best promote our maximum employment and price stability goals.  If the economy remains strong and inflation is not sustainably moving toward 2 percent, we can dial back policy restraint more slowly.  If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can move more quickly.  Policy is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.

随着经济的发展，货币政策将进行调整，以最好地促进我们的最大就业和价格稳定目标。 如果经济保持强劲，通货没有持续向2%靠拢，我们可以更慢地撤回政策约束。 如果劳动力市场意外疲软或通货膨胀比预期更快下降，更快采取行动。 政策在应对追求双重任务所面临的各种风险和不确定性方面处于有利地位。

The Fed has been assigned two goals for monetary policy—maximum employment and stable prices. We remain committed to supporting maximum employment, bringing inflation sustainably to our 2 percent goal, and keeping longer-term inflation expectations well anchored. Our success in delivering on these goals matters to all Americans.  We understand that our actions affect communities, families, and businesses across the ry.  Everything we do is in service to our public mission.  We at the Fed will do everything we can to achieve our maximum employment and price stability goals.Thank you.I look forward to our discussion.

美联储被赋予了两个货币政策目标——最大限度的就业和稳定的价格。我们仍然致力于支持最大限度的就业，将通货膨胀地降至2%的目标，并将长期通胀预期牢牢锚定。我们实现这些目标的成功对所有美国人都很重要。我们理解我们的行动影响着全国社区、家庭和企业。我们所做的一切都是为了公共使命。美联储将尽一切努力实现我们的最大就业和价格稳定目标。谢谢。我期待着我们的讨论。

以下为记者问答部分：

COLBY SMITH.  Thank you. Given the expectation that the election outcome will produce policies that would meaningfully impact the US economy next year, how is the Committee taking these proposals into ac for upcoming decisions, including potentially the next one in December. And can you give us any more sense of how proactive or reactive the Fed is prepared to be to changes in economic policies with the next administration?

CHAIR POWELL.  Sure. So let me say that in the near term, the election will have no effects on our policy decisions. As you know, many, many things affect the economy and anyone who writes down forecasts in their job will tell you that the economy is quite difficult to forecast looking out past the very near term. Here, we don't know what the timing and substance of any policy changes will be. We therefore don't know what the effects on the economy would be,specifically, whether and to what extent those policies would matter for the achievement of our goal variables, maximum employment and price stability. We don't guess, we don't speculate, and we don't assume. Now, just in principle, it's possible that any administration's policies or policies  put in place by Congress could have economic effects over time that would matter for our pursuit of our dual mandate goals. So, we -- along with less other factors, forecast of those economic effects would be included in our models of the economy and would be taken into ac through that channel.

NICK TIMIRAOS.  Chair Powell, Nick Timiraos from the Wall Street Journal. Roughly one year ago when the ten-year Treasury was flirting with five percent and three-year border trades were near eight percent, you noted how higher borrowing costs if they were sustained could weigh on economic activity. Given that you've said you believe policy is restrictive and the Fed is now dialing back that restriction, are the growth risks presented by higher US Treasury yields today any different from those you identified one year ago when inflation was still meaningfully above your target?

CHAIR POWELL.  So I would just say this, yes we've watched the run-up in bond rates  and it's nowhere where it was, of course, a year ago. I guess the -- you know, the long-run rates   are well below that level. So we're watching that, things have been moving around, and we'll see where they settle. I think it's too early to really say where they settle. Ultimately -- I'm sure we've all read these decompositions of what, you know -- and I certainly have, but it's not really our job to provide our specific decomposition. I will say, though, that it appears that the moves are not principally about higher inflation expectations, they're really about a sense of more likely to have stronger growth and perhaps less in the way of downside risks. So that's what they're about. You   know, we do take financial conditions into ac. If they're persistent and if they're material, then we'll certainly take them into ac in our policy. But I would say we're not at that stage right now, it's just something that we're watching. And again, these things don't really have mainly to do with Fed policy, but to do with other factors in the economy.

NICK TIMIRAOS.  If I could follow up, is this September SEP are those rate projections still valid; do they still seem relevant given where we are now?

CHAIR POWELL. You know what, it's you get halfway through the cycle between the   last set and the next set. I wouldn't want to comment one way or the other. You know, people are -- let's talk about the data we've gotten since the last meeting. So, in the main the economic activity data have been stronger than expected. The NIPA revision was stronger. Certainly the September employment report was stronger, the October report not stronger, retail sales stronger. So overall, though, I think you take away a sense of some of the downside risks to economic activity having been diminished with the NIPA revisions in particular; and so overall feeling good about economic activity. So, I think we would factor that in. At the same time, we got one   inflation report which was -- it wasn't terrible, but it was a little higher than expected. So, I think really the question is, is December -- and you know, by December we'll have more data, I guess  one more employment report, two more inflation reports, and lots of other data and, you know,    make a decision as we get to December.

JEANNA SMIALEK.  Jeanna Smialek from the New York Times. Thanks for taking our  questions, Chair Powell. When it comes to December, what will you be looking at specifically as you try to make that decision? And then as of the Fed's economic projections in September you    had written down for quarter point interest rate cuts in 2025, do you still think that those are likely? Is that sort of the baseline outlook at this point, or has that shifted? And if it shifted at all, can you give a little bit of detail as to why?

CHAIR POWELL. You know, I can't -- we don't fill out an SEP, and I can't acterize  one that wasn't filled out today. So, I can't really speak for kind of exactly where the Committee  is. I would just say for December we're going to be -- again, in every meeting we're going to be   looking at the incoming data and how that affects the outlook. As you know, we're in the process of recalibrating from a fairly restrictive level at 5.33 percent. After today's move we're down 75  basis points. And we're asking ourselves, "Is that where we need to be?" You know that we're trying to steer between the risk of moving too quickly and perhaps undermining our progress on inflation or moving too slowly and allowing the labor market to weaken too much. We're trying  to be on a middle path where we can maintain the strength in the labor market while also enabling further progress on inflation. We think that's where we are, but that's the question we're going to be asking in September and in other meetings. And again, I can't really  you on    the Committee's thinking, because we don't fill out an SEP at this meeting.

JEANNA SMIALEK. Yes, totally appreciate that. I guess when it comes to your own thinking, do you think that a full percentage point of rate cuts in 2025 is a reasonable outlook?

CHAIR POWELL. Again, I'm going to wait -- we're going to wait and see how things come in in December. I mean, I -- it's just -- I would put it this way, we're on a path to a more neutral stance. And that's very much what we're on. That has not changed at all since September. And you know, we're just going to have to see where the data leads us. We have, you know, a whole six weeks of data to look at to make that decision in December. Obviously, I'm not ruling it out or in, but you know, I would say -- you know, I would say that -- you know, again, we didn't  the SEP, so I'm not going to acterize, you know, where the Committee would be.

HOWARD SCHNEIDER.  Thanks. Howard Schneider with Reuters. I wondered if you could please elaborate and explain a little bit the two changes in the language of the statement here in the first paragraph when you say, "inflation has made progress," ping the word,"further progress," and in the second paragraph ping the sentence of, "The Committee had   gained greater confidence and inflation was progressing towards its two percent goal." Is there any policy substance behind either of those changes in language? Is it meant to open the door to a December pause? Is it meant to communicate anything about the stickiness of core inflation in the last three months?

CHAIR POWELL.  Not really, no. So let me tell you what we were thinking. So the test  of gaining further confidence was a -- was our test for the first rate cut, right? And so we net that test in September, and therefore we take that test strategy, leave it in, then it's new forward guidance. "It's brand new forward guidance. What do you mean by it? Are you making it --

you're requiring yet further --" we have to say yes or no at every meeting whether we've made further progress. The point is we have gained confidence that we're on a sustainable path down to two percent. So that I would tell you is what that's really all about. And it's not meant to send a signal. Neither of those is meant to send a further signal. And you know, seeing further progress it becomes a test where we don't want to be -- we don't think it's a good time to be doing a lot of forward guidance. You know, we're -- there's a fair amount of uncertainty in that what I've said the path that we're on we do know what -- where the destination is, but we don't know the right pace, and we don't know exactly where the destination is; so the point is to find that, to find the right pace and the right destination as we go. And I think there's a fair amount of uncertainty about that and I -- you know, you don't want to tie yourself up with guidance, you want to be able to make sensible decisions as you go.

STEVE LIESMAN.  Steve Leishman, CNBC. Mr. Chairman, you talked about higher rates, perhaps from an expertise of higher growth. You didn't talk about it in terms of expectations of higher deficits. Is that something you think might be behind the recent rise in interest rates, and is that – are rising deficits a concern to you? So we know common and fiscal policy -- and again, I'm -- I don't have a lot more to say on what's driving bond yields. In terms of policy changes, though, let me give you a sense of how this works in the ordinary case. Let's say Congress is considering a rewrite of the tax laws,  doesn't matter what's in the content. So, we would follow that. At a certain point we'd think we see the outline, so we'd start to model it. And then we'd wait and we'd wait, and then at a certain point the staff would brief the FOMC and say, you know, "This is -- these are the likely effects." There's lots and lots of literature on the effects of tax policy changes on various parts of the economy. So, we'd try to get smart on that. And then the law actually passes and, you know,you'd start to put it -- you'd probably run an alternative simulation before that happens, just to keep people trying to understand it, then you -- then when it actually passes it goes into the model, along with a million other things. So you know, these -- we have a very large economy.

Many things are affecting it at any given time. And you know, a law change of some kind would go in there, but it would go in. But it would -- you know, it's a process that takes some time.Clearly the legislative process takes a lot of time. And of course, the real question is not the effect of that law, it's all of the policy changes that are happening, what's the net effect and, you  know, the overall effect on the economy at a given time. So, I think that's a process that takes a lot of time and that we go through all the time with every administration constantly. And I just -- this will be no different. But you know, right now we're -- there's nothing to model right now. We're -- it's such an early stage. We don't know what the policies are, and once we know what they are, we won't have a sense of, you know, when they'll be implemented or all those sorts of things. So I think I would just say .

CHAIR POWELL.  We're not doing that now, and all that will take time, and it will be very much regular order when we do do that.

STEVE LIESMAN. If I could just follow up on Nick's question. Are the current rates something you feel like you need to lean against in that they go against the direction of policy by  being -- adding restriction to the economy, or do you just take them as a given or perhaps a signal that you should do less?

CHAIR POWELL.  I -- look, I just think -- the first question is how long will they be sustained? If you remember, the five percent ten-year people were drawing massively important  conclusions only to find, you know, three weeks later that the ten-year was 50 basis points lower. So, you know, it's material changes and financial conditions that last, that are persistent that really matter. And we don't know that about these. What we've seen so far, you know, we're watching it, we're reading -- you know, we're doing the decompositions and reading others, but right now it's not a major factor in how we're thinking about things.

CHRIS RUGABER.  Thank you. Chris Rugaber at Associated Press. You mentioned the positive economic data that we've seen since the September meeting, including the revisions to  things like savings, higher GDP growth. We saw stock market jump yesterday. That's renewed some of the questions about why do many cuts at all in this -- with this back?

CHAIR POWELL.  So you're right, as I mentioned, and as you mentioned, the latest economic data have been strong and that's, of course, a great thing and highly welcomed. But of  course, our mandate is maximum for employment and price stability, and we think that even with today's cut policy is still restrictive. We understand it's not possible to say precisely how restrictive, but we feel that it is still restrictive. And if you look at our goal variables, the labor market has cooled a great deal from its overheated state of two years ago and is now essentially  in balance. It is continuing to cool, albeit at a modest rate, and we don't need further cooling, we don't think, to achieve our inflation mandate. So that's the labor market. Inflation has moved down a great deal from its higher -- its highs of two years ago, and we judge, as I mentioned, that it's on a sustainable path back to two percent. So the job's not done on inflation. But if you look at those two things, we judged in September that it was appropriate to begin to recalibrate our policy stance to reflect this progress, and today's decision is really another step in that process.  Overall, as I mentioned, we believe that with an appropriate recalibration of our policy stance,  we can maintain strength in the labor market even as our policy stance enables further progress toward our inflation goal.

CHRIS RUGABER.  Great. And just to follow up, could you -- what might cause you to pause rate cuts in December, what kind of economic data would lead you to that path? Thank you.

CHAIR POWELL.  So we haven't, you know, made any decision like that at all. But we're -- so we're in the process, as I mentioned, of moving policy down -- our stance down over time to a more neutral level. And as a general matter, as we move ahead we are prepared to adjust our assessments of the appropriate pace and destination as the outlook evolves. So, for example, if we were to see the labor market deteriorating, we'd be prepared to move more quickly. Alternatively, as we approach levels that are plausibly neutral or close to neutral, it may turn out to be appropriate to slow the pace at which we're dialing back restriction. Again, haven't made any decisions about that, but that's certainly a possibility. If you -- you can think of it as similar to what we do with asset runoff with QT. So we reach a point where we slow the pace, much like an airplane reaching the airport slows down. And so it -- you know, it -- yes we're thinking about it that way, but it's something that we're just beginning to think about.

EDWARD LAWRENCE.  Thanks, Chair Powell. So with this noise in the jobs reports that we've seen and you look at the Fed's favored inflation, PC inflation, overall it's 2.1 percent very close to the Fed's target. But core inflation is 2.7 percent, and it's been that way since July. So why doesn't this data give fuel to a rate pause for this meeting?

CHAIR POWELL.  Well, so I think if you look at the three- and six-month -- you're quoting the 12-month.

CHAIR POWELL.  So we look at all of them, right -- Yes. -- but if you look at three- and six-month core PCE, you'll see they're around 2.3 percent. So we look at all of them. And we look at -- we also -- we look at 12 as well. But what it's telling us is that we really have made significant progress. And we expect there to be bumps. For example, you know, the last three months of last year their core PCE readings were very, very low, probably unsustainably low. So that's why you see -- that's why forecast generally see a couple of upticks toward the end of the year. On the other hand, the January reading certainly looks like an example of residual seasonality, so that we saw last year. So, when that falls out of the 12-month calculation in

February, we should see it staying down. So there will literally be a bump up and then down. We  understand that. Overall, you see the progress on inflation, and you also look at the economy and you say, "What's -- what is the inflation story now? Where is it coming from?" So I point to a couple of things. One is the non-housing services and goods, which together make up 80 percent  of that -- of the core PCE index, are back to the levels they were at the last time we had sustained two percent inflation, which happens to be in the early 2000s for a period of five, six, seven years. So they're back to that level. What's not is housing services. So let's talk about housing services. Housing services is higher. What's going on there is, you know, market rents, newly signed leases, are experiencing very low inflation. And what's happening is older -- you know,leases that are turning over are taking several years to catch up to where market leases are;market rent leases are. So that's just a catch-up problem.

It's not really reflecting current inflationary pressures, it's reflecting past inflationary pressures. So that's one thing. The other thing is I'd say look at the labor market, not a source of inflationary pressures. Where is it coming from? It's not a very tight economy. What is the story about inflation? You see that catch- up inflation also in insurance and in several other areas. So, you're seeing -- we're not declaring victory, obviously, but we feel like the story is very consistent with inflation, continuing to come down on a bumpy path over the next couple of years and settling around two percent. That story is intact, and it won't be one or two really good data months or bad data months aren't going to really change the pattern at this point now that we're this far into the process.

EDWARD LAWRENCE. So you're quickly trying to get to that neutral rate that you see, or do you foresee that you have some time to get there?

CHAIR POWELL.  Nothing in the economic data suggests that the Committee has any need to be in a hurry to get there. We are seeing strong economic activity, we are seeing ongoing strength in the labor market; we're watching that carefully. But we do see maintaining strength there. And so we think that the right way to find neutral, if you will, is carefully, patiently. Again, that's not meant to have a specific meaning other than we -- to the extent the economy remains strong, we have the ability to take advantage of that as we try to navigate that middle path between the two risks.

CRAIG TORRES. Hi, Chair Powell, Craig Torres from Bloomberg. Two questions today, did you learn anything about what Americans think about the economy from the election results; first question. Second question, I want to talk about some labor market indicators, and I do so with great respect for your attentiveness to the maximum employment side of the mandate, Chair Powell. So the unemployment rate has been at four percent or higher for six months. One of the   broadest measures of unemployment is up about a half a point from a year ago. Compensation gains are sliding back. The quits rate, a signal of labor market dynamism, has been heading down to that bad neighborhood of the 20 teens. So you have put a marker at Jackson Hole saying any further cooling is unwelcome. It is cooling, generally, a little bit further. So at what point do we reach what you would describe as a shortfall from maximum employment? Thank you.

CHAIR POWELL. Sure. So on your first question, I'm not going to talk about anything that relates directly or indirectly to the election. On the second one, you're -- you know, this is the great question, and it's the one we think about all the time. So I'll just say a couple things.

You know, there's nothing really surprising here. What we know is that the unemployment rate is low. We also know that it's come down significantly -- sorry, moved up significantly from a year  or so ago. So we've seen a big change upward in unemployment. Sometimes that has meant bad   things. So far, it doesn't appear to be. It appears that the -- I wouldn't say that the labor market has fully stabilized, because I do think it's continuing to very gradually cool, but it seems to be in a good place. And our policy, of course, is designed to keep it in that good place, to maintain the  strength in the labor market, while also enabling further progress on inflation. You know, you mentioned a bunch of indicators, and you're right, you know, the openings to unemployment rate is back to a normal level. I would acterize it more broadly as "normalizing". You mentioned  wages. Wages are still running just a bit above where they would need to be to be consistent with two percent inflation, unless productivity is going to remain at this high level. If we see the -- if   we see productivity, you know, more sustainable at these high levels, then that would sustain higher wage gain. So I would say -- in fact, you can say it the other way, that wage increases are  now consistent with two percent inflation given current productivity readings. But of course, you know, the lore on productivity readings is whenever you see high readings, you should assume they're going to revert pretty quickly to the longer-term trend. That has always been the case for 50 years. But you know, it may be that we're now five years -- if you look at the NIPA revisions that came out a month ago, we're five years into a nice set of productivity readings which are sustained and very healthy. But overall, it's a good labor market. We could talk about 20 different data series. We'll be looking at all of them, of course. But you know, we don't want the labor market to soften much from here. We don't think we need that to happen to get inflation back to two percent.

VICTORIA GUIDA. Hi, Victoria Guida with Politico. Some of the president elect’s advisors have suggested that you should resign. If he asked you to leave, would you go?

CHAIR POWELL. No.

VICTORIA GUIDA. Can you follow up on is -- do you think that legally that you're not required to leave?

CHAIR POWELL. No.

MICHAEL MCKEE. Michael McKee from Bloomberg Radio and Television. You talk a lot about what the data are telling you and how you are dependent on the data. But in terms of forward-looking assessments of the economy, what are you hearing from CEOs or other officials around the ry? What did you hear today from the regional bank presidents about what

companies and consumers think about where the economy is going from here, rather than looking backwards? And does that match up with what your forecasts have been and what you think the appropriate policy path should be?

CHAIR POWELL. So it's hard to acterize a, you know, really interesting set of discussions we had and of course you'll see them in the minutes in three weeks. But I would say   this, I think, you know, the comments from our reserve bank colleagues and from the CEOs that  they talk to are pretty constructive on the economy right now; pretty constructive, feeling that the labor market is, you know, back to normal to the point where it's no longer that much of a discussion topic in their world, whereas two years ago it was all they were talking about. So they feel like the labor market is in balance. People feel good about where the economy is. Demand is obviously pretty strong. And you know, you're seeing, what, 2.8 percent growth in the third quarter estimated, maybe the year is two and a half. This is -- you know, this is a strong economy. It's actually remarkable how well the U.S. economy has been performing with, you know, strong growth, a strong labor market, inflation coming down. We're, you know, really performing better than any of our global peers. And I think that is reflected in what you hear from -- what I hear people hear from CEOs. I don't get to talk to a lot of CEOs in my job, but I hear what others summarize from those. And of course, I hear the reserve bank presidents do a lot of that, and it's pretty constructive overall. Now, that's not to say there are areas of caution   and things like that, but ultimately, overall, pretty positive.

MICHAEL MCKEE. To follow up the areas of caution, if there were black clouds on the horizon that you identified as something you're watching, what would they be?

CHAIR POWELL. I think it's -- you know, it's things like -- clearly geopolitical risks around the world are elevated, and just as clearly they have had relatively little effect on the U.S. economy. Now, that can change through the price of oil or otherwise, but people talk about those as, you know, something that's on the horizon all the time. But you know, ultimately, if you look at the U.S. economy, its performance has been very good. And that's what we hear from businesspeople, an expectation that that will continue. With anything, people feel next year -- I've heard this from several people, that next year could even be stronger than this year.

ANDREW ACKERMAN. Hi, it's Andrew Ackerman with The Washington Post. I just wanted to follow up on the discussion earlier on fiscal policy, your predecessors Greenspan and Volcker spoke up loudly when they thought large budget deficits endangered financial --economic or financial stability. Will you do that, too? And right now we're in a period of full employment, we have large budget deficits and debt at historic highs that are -- and rising. Is that something you would speak out against?

CHAIR POWELL. So you know, I have said many times no more, no less than what the predecessors you mentioned have said. And what that is is that the U.S. fiscal -- federal government's fiscal path -- fiscal policy is on an unsustainable path. The level of our debt relative to the economy is not unsustainable. The path is unsustainable. And we see that. And, you know,  you've got a very large deficit at -- you're at full employment and that's expected to continue. So   it's important that we -- you know, that to be dealt with; it is ultimately a threat to the economy.

Now, I can say that I don't have oversight, we don't have oversight over fiscal policy. I've said it on many occasions, just said it again.

ANDREW ACKERMAN. Okay, thank you. I guess the other question is to follow up on  Victoria's question, do you believe that the president has the power to fire or demote you and has the Fed determined the legality of a president demoting at-will any of the other governors with leadership positions?

CHAIR POWELL. Not permitted under the law. ANDREW ACKERMAN. Not what?

CHAIR POWELL. Not permitted under the law. MICHELLE SMITH. Thank you. Courtenay.

COURTENAY BROWN. Chair Powell, Courtenay Brown from Axios. In response to Howard's question, you said it wasn't an ideal time to give forward guidance because of the economic uncertainties. Can you lay out what some of those uncertainties are and whether or not it includes some of the proposals that the president-elect has put out on the campaign trail, tariffs, for instance?

CHAIR POWELL. No, I was not referring to the new administration's policies at all, nor will I today. So I -- what I'm just saying is as we look ahead, we know -- because -- and I mentioned this in my statement, that the risks are two-sided. I guess I should start by saying that we think that the economy and we think our policy are both in a very good place; a very good place. And -- but as you look forward, you say, "What are the risks?” And one risk is that we would move too quickly and find ourselves having moved too quickly and inflation comes back and we lost our chance to get inflation back to two percent. So we have to avoid that risk. And that -- to avoid that risk, that means you want to move carefully. The other risk is that we move too slowly, and that we allow the labor market to weaken too much and do unnecessary damage to the labor market and to people's working lives. That says don't get behind the curve. So these are two -- these two things are the two risks that we have to manage. And so we're in the middle here. We try to be in the middle and deal with both of the -- manage both of those. Again, the idea is to maintain support, the strength that we have in the labor market and the economy, but also with somewhat less restrictive but still restrictive policy, enable further progress toward our two percent inflation goal. There -- and so there -- you know, there -- this is the thing, we're --

meeting by meeting we're going to be making our assessment of what the right path is. You know, it's not as important -- the precise timing of these things is not as important as the overall arc of them, and the arc of them is to move from where we are now to the sense of neutral, a more neutral policy. We don't know exactly where that is, we only know it by its works. We're pretty sure it's below where we are now. But as we move further, there will be more uncertainty  about where that is, and we're going to move carefully as this goes on so that, you know, we can increase the chances that we will get it right.

SIMON RABINOVITCH. Thank you, Chair Powell, Simon Rabinovitch with The Economist. I know you don't want to share your decomposition of bond yields, but if you look at the breakevens, it is clear that longer-term inflation expectations do seem to have risen up at about 2.5 percent, for example, on the five-year. That's up half a point from when you cut in September. Do you have any concern at all that longer-term inflation expectations are de-anchoring, or put another way, are anchoring at a slightly higher level? Thanks.

CHAIR POWELL. So we would be concerned if we saw -- if we thought we saw longer- term inflation expectations anchoring at a higher level. That's not what we're seeing. We're still

seeing between surveys and market readings broadly consistent with -- you know, I was -- I looked at the five-year, five-year earlier today and it's probably moved. But it's just not -- it's just -- it's kind of right where it's been, and also it's pretty close to -- consistent with two percent PCE inflation. So that's one that's been a traditional one that we look at a lot. But overall, expectations seem to be -- and have really have throughout this in a place that's consistent with two percent

inflation. But you're right to say we watch that very carefully, and we will not allow inflation expectations to drift upward. But that's really why we reacted so sharply back in 2022 was to avoid that.

KELLY O’GRADY. Hi, Chair Powell, Kelly O'Grady, CBS News. We just talked about what you've heard from business leaders on the economy. But many average Americans are still   not feeling the strength of the economy in their wallets. So what's your message to them on when they might expect relief?

CHAIR POWELL. So you're right that we -- you know, we say that the economy is performing well, and it is, but we also know that people are still feeling the effects of high prices, for example. And we went through -- the world went through a global inflation shock, and inflation went up everywhere. And you know, it stays with you because the price level doesn't come back down. So what that takes is it takes some years of real wage gains for people to feel better. And that's what we're trying to create. And I think we're well on the road to creating that. Inflation has come way down, the economy is still strong here, wages are moving up but at a sustainable level. So it's just -- I think what needs to happen is happening, and for the most part has happened. But it will be some time before people, you know, regain their confidence and feel that. And you know, we don't tell people how to feel about the economy, we respect --

completely respect what they're feeling. Those feelings are true, they're accurate. We don't question them, we -- you know, we respect them.

KELLY O’GRADY. And just a quick follow-up, President-elect Trump has been critical of your performance. Any concern about his influence on the Fed's independence?

CHAIR POWELL. I'm not going to get into the -- any of the political things here today;

NANCY MARSHALL-GENZER. Hi, Chair Powell, Nancy Marshall-Genzer with Marketplace. What is your plan if we start to see stagflation?

CHAIR POWELL. So that's a -- you know, the whole plan is not to have stagflation, so we don't have to deal with it. So that's our -- that is actually our plan. [Laughter] You know, it's, of course, a very difficult thing because you're -- you know, you're -- anything you do with interest rates will hurt one side or the other, either the inflation mandate or the employment mandate. I would just say that, you know, we've been able to see inflation come down a whole lot, you know, much closer to our goal without the kind of sharp increase in unemployment that has often accompanied programs of disinflation. So knock on wood, we've gotten this far without seeing a real weakening in the labor market. And we believe we can complete the inflation task while also keeping labor markets strong, and that, of course, is exactly what we're trying to do.

NANCY MARSHALL-GENZER. Can you rule out an interest rate hike next year?

CHAIR POWELL. I -- no I wouldn't rule anything out in that far away. But that's certainly not our plan. I mean, our baseline expectation is that we'll continue to move gradually

down towards neutral, that the economy will continue to grow at a healthy clip, and that the labor market will remain strong. If you look at our -- that will not change from the September SEP.

That is our baseline forecast, and short of some exogenous event, it will -- that will continue to be our forecast for the foreseeable future. So but ultimately, you know, I -- it's -- we're not in a  world where we can afford to rule things out a full year in advance. It's there's just too much uncertainty in what we do.

MICHELLE SMITH. Let's go to Jean for the last question.

JEAN YUNG. Hi, Chair Powell, Jean Yung with MNI Market News. I wanted to go back to a comment that you had made about Americans being quite unhappy about the cumulative price level rises over the past few years, even though now inflation is back on a path to two percent. Would it be appropriate for the Fed to undershoot for a while on its inflation goal under the average inflation targeting regime so people have a chance to catch up?

CHAIR POWELL. No, that's not the way our framework works. We're aiming for inflation at two percent. We're -- we do not have -- we did not think it would be appropriate to   deliberately undershoot. And you know, part of the problem there is that low inflation can be a  problem, too, in a way. But that's not part of our framework, and it's not something we're going to be looking at in our framework review. Thank you very much.