In a speech delivered immediately on the U.S. Financial Coverage Discussion board in New York Metropolis, Federal Reserve Chair Jerome Powell emphasised the central financial institution’s cautious strategy amid prevailing financial uncertainties.
Powell reiterated the Federal Reserve’s readiness to keep up present rates of interest, adopting a “wait and see” stance because it screens the impacts of latest coverage modifications and financial indicators.
“We don’t must be in a rush, and are nicely positioned to attend for larger readability,” he mentioned.
Powell highlighted the robustness of the U.S. labor market, noting that employers added 151,000 jobs in February, bringing the typical month-to-month job features to 191,000 since September.
The unemployment fee edged up barely to 4.1%, remaining inside a slender vary between 3.9% and 4.2% over the previous 12 months.
BREAKING: Fed’s Powell: The economic system is ok; it would not want us to do something.
— unusual_whales (@unusual_whales) March 7, 2025
He noticed that wage progress has moderated to a extra sustainable tempo, aligning labor provide and demand, thereby decreasing inflationary pressures from the labor market.
“With wage progress moderating and labor provide and demand having moved into higher steadiness, the labor market just isn’t a major supply of inflationary strain,” he mentioned.
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Inflation traits
Addressing inflation, Powell famous a major decline from its mid-2022 peak above 7% to 2.5% as of January. He cautioned that latest readings stay considerably above the Federal Reserve’s 2% goal.
“The trail to sustainably returning inflation to our goal has been bumpy, and we anticipate that to proceed,” Powell mentioned.
He emphasised the significance of not overreacting to short-term fluctuations and reiterated the central financial institution’s dedication to carefully monitoring inflation traits to make sure they align with long-term objectives.
“Inflation will be risky month-to-month, and we don’t overreact to at least one or two readings which are greater or decrease than anticipated,” he mentioned.
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Commerce insurance policies and financial outlook
Powell touched on latest commerce insurance policies, together with the Trump administration’s bulletins and subsequent delays on steep import tariffs affecting buying and selling companions equivalent to Mexico, Canada, and China.
These coverage shifts have contributed to market volatility and have difficult the financial outlook. Powell emphasised the necessity for readability in these areas earlier than making any changes to financial coverage, stating that the central financial institution is well-positioned to attend for larger readability on the financial outlook.
Given these components, Powell indicated that the Federal Reserve is prone to hold its key rate of interest unchanged within the coming months. The central financial institution had beforehand lower the benchmark rate of interest by 100 foundation factors to a spread of 4.25% to 4.5% in late 2024 and maintained this coverage in January.
Crypto reactions
Crypto has responded to Powell’s feedback with cautious optimism. Traders seem reassured by the Federal Reserve’s affected person strategy, although issues about potential stagflation and Trump’s ongoing crypto summit persist.
Bitcoin is at the moment buying and selling at $88,300.
