Federal Reserve Chair Powell on Inflation Progress and Interest Rates

Inflation Status and Outlook

• 🎯 Inflation has eased significantly from its mid-2022 highs but remains somewhat elevated relative to the Federal Reserve's 2% long-run goal.
• 📈 Total Personal Consumption Expenditure (PCE) prices rose 2.8% over the 12 months ending in September.
• 📊 Core PCE prices, excluding volatile food and energy, also rose 2.8%, indicating an increase from earlier in the year, partly due to rising inflation for goods.
• 📉 Disinflation appears to be continuing for services.

Monetary Policy and Interest Rates

• 📉 The Federal Open Market Committee (FOMC) decided to lower the policy interest rate by a quarter percentage point.
• 🏦 This decision was made in support of goals related to the balance of risks for employment and inflation.

Reserve Management and Expectations

• 🏦 Purchases of shorter-term Treasury securities will be initiated solely to maintain an ample supply of reserves.
• 🧠 Near-term measures of inflation expectations have declined from their peaks earlier in the year, as reflected in both market and survey-based measures.
• ✅ Most measures of longer-term inflation expectations remain consistent with the 2% inflation goal.