Federal Reserve press conference, 2024-05-01 — Chair Jerome Powell

Question (Craig Torres, Bloomberg): Craig Torres from Bloomberg. Two questions. First, a simple one. Given the run of data since March, has the probability in your mind of no cuts this year increased or stayed the same? That’s the first question. Second question. Chair Powell, you joined the Board in 2012, and I’m sure you remember, as I do, what the jobless recovery was like: lawyers, accountants, all kinds of highly qualified people who couldn’t get jobs. And given your history there, I wonder if there’s an argument for being more patient with inflation here. We have strong productivity growth that’s helping wages grow up—go up. We have good employment. And so it seems to me there’s a lot of hysteria about inflation. I agree—you know, nobody likes it, but is there an argument for being patient and working with the economic cycle to get it down over time? Thank you.
Answer: So, on your first question, I don’t have a probability estimate for you. But all I can say is that, you know, we’ve said that we didn’t think it would be appropriate to cut until we were more confident that inflation was moving sustainably down to 2 percent. We didn’t get our confidence, in that [it] didn’t increase in the first quarter. And, in fact, what really happened was we came to the view that it will take longer to get that confidence. And I think there are—you know, I think it’s—the economy has been very hard for forecasters broadly to predict—to predict its path. But there are paths to, to not cutting, and there are paths to cutting. It’s really going to depend on the data. In terms of the employment mandate, to your point, if you go back a couple of years, our, our sort of framework document says that, when you look at the two mandate goals, and if one of them is further away from goal than the other, then you focus on that one. It actually—it’s the time to get back there times the, you know, times how far it is from the goal. And that was clearly inflation. So our focus was very much on inflation. As—and this is what we referred to in the statement. As inflation has come down, now to below 3 percent on a—on a 12-month basis, it’s become—we’re now focusing [on] the other goal. The employment goal now comes back into focus. And so we are focusing on it. And, and that’s how we think about that.

Question (Mark Hamrick, Bankrate): Thank you. Mark Hamrick with Bankrate. Mr. Chairman, what can you tell us about the approach that you take with your role in the sense of trying to achieve consensus, which you recently identified as a priority, while allowing for a range of views or even dissent? We don’t see many dissenting votes in the official statements, even when more spirited discussions are noted in the minutes after the fact. How do you avoid groupthink and avoid a higher risk of a policy mistake? Thank you.
Answer: So I think if you listen to, and you all do, listen to my 18 colleagues on the FOMC, you’ll see that we do not lack for a diversity of voices and perspectives. We really don’t. And it’s one of the great aspects of the Federal Reserve System. We have 12 Reserve Banks around the country where they have their own economic staff, not the people who work here at the Board. There are different people. You know, and so each, each Reserve Bank has its own culture around monetary policy and its own approach and that kind of thing. It guarantees you a diversity of perspectives. So I think that the perspectives are very diverse. But—and, in terms of—in terms of dissents, you know, we have dissents. And, you know, a thoughtful dissent is a good thing, if someone really makes you think, that kind of thing. But all I can say from my standpoint is I try—I listen carefully to people. I try to incorporate their thinking or do everything I can to incorporate their thinking into what we’re doing. And I think many people, if they feel that’s happening, you know, that for most people most of the time, that’ll be enough. And—but I’m not—I mean, it’s, it’s not, you know, frowned upon or illegal or against the rules or anything like that. It just is the way things come out. And I mean, I think we have a very diverse group of rounded people—frankly, more diverse than it used to be in many dimensions, more diverse from the obvious gender and demographic ways, but also we have more people who are not Ph.D. economists. So we have people from business and law and academia and things like that. So I think we actually do have quite a good diverse perspective. I think all of us read these stories about the lack of diversity, and we look around the room and say, “I don’t understand. I really don’t understand what they’re talking about.” So—but I get the question, though. Thank you very much.