31.07.2025 05:49
Following the Federal Reserve's decision to hold interest rates steady—a decision opposed by two members of the committee—Chairman Jerome Powell addressed the nation in a live statement. His remarks offered a nuanced perspective on the current economic climate and the Fed's future course of action.
Powell highlighted the economy's underlying strength, although acknowledging a moderation in growth. He cited softening consumer spending and persistent weakness in the housing sector as contributing factors to this slowdown. Despite this, the labor market, characterized by low unemployment and stable conditions, remained remarkably resilient, approaching full employment, albeit with slightly decelerated wage growth that still outpaced inflation.
Inflation, while significantly down from 2022 peaks, continues to exceed the Fed's targets, with core personal consumption expenditures (PCE) projected to reach 2.7% year-over-year growth in June. Powell attributed some inflationary pressures to tariffs, yet emphasized that most long-term inflation expectations align with the Fed's objectives, suggesting a potentially transient impact from these trade measures. The ongoing uncertainty surrounding the government's policy adjustments further complicates the economic outlook.
The Fed's current monetary policy, described as moderately restrictive, aims to mitigate inflation risks. However, Powell acknowledged downside risks in the labor market, indicating that the situation warrants close monitoring. He stressed that upcoming economic data releases will heavily influence future policy decisions, with a comprehensive policy review anticipated by the end of summer. No firm decisions regarding the September meeting have been made, and the level of uncertainty surrounding future economic prospects has remained relatively stable since the previous meeting. The ongoing complexity of international trade negotiations adds another layer of uncertainty to this already dynamic economic landscape. Further clarification is expected in the coming months.
