Federal Reserve press conference, 2025-09-17 — Chair Jerome Powell

Question (Michael McKee, Bloomberg): If I could follow up: Every year since 2015, the SEP has forecast that you would hit your target two years later. And this year, this SEP says you’re going to hit your target two years later. Two percent does not seem to be in sight. Does that suggest that the 2 percent target is not really achievable? And does this present any credibility problems for you in telling people that that’s what you’re going to do, if you can never reach it?
Answer: Well, I mean, you’re right. It does say we’re going to get to 2 percent inflation in 2028—at the end of ’28. But that’s—you know, that’s literally how you put the projections together. You’re writing down a rate path which is designed to create, over the course of the SEP, you know, time frame, 2 percent inflation, and maximum employment too. So that’s, that’s all that is. You know, we don’t—no one really knows where the economy will be in three years, but the nature of the exercise is to write down policy that you believe would return to the 2 percent goal over the—at least by the end of the exercise.

Question (Elizabeth Schulze, ABC News): How concerned are you about the slowdown in the jobs market for households at home, especially younger Americans struggling to land a job?
Answer: So it’s an interesting labor market. And obviously we think it’s appropriate that we reduce our rates so that we become more neutral, which will be—which, presumably, will be better for the labor market. You see people who are sort of more at the margins—so kids coming out of college and younger people, minorities—are having a hard time finding jobs. The overall job-finding rate is very, very low. However, the layoff rate is also very low. So you’ve got a low—a low-firing, low-hiring environment. And the concern is that if you start to see layoffs, the people who are laid off won’t—there won’t be a lot of hiring going on. So that could very quickly flow into higher unemployment. In a healthier economy, healthier labor market, there would be jobs for those people. But now the hiring rate is very, very low. So that’s been a growing concern over the last few months, and it’s one of the reasons why we think it’s appropriate that we begin to shift our policy focus toward a more balanced one.

Question (Edward Lawrence, Fox Business): Thanks, Mr. Chairman. Edward Lawrence from Fox Business. So we saw the preliminary benchmark revisions, down 911,000. The revisions for June were the first negative revisions we’ve seen since December of 2020. You know, how can the Fed base important decisions on rate and what to do with the interest—with the interest rates on data that seems to be, as you’ve called it in the past, noisy?
Answer: So, on the QCEW, the revision that we saw was almost exactly what we expected. It was amazing how close the expectation was. And the reason for that is for the last bunch of quarters, there’s been a—almost a predictable overcount. And I think the, you know, the Bureau of Labor Statistics really does understand this, and they’re working hard to fix it. It’s got to do—of course, it has something to do with low response rates. But it’s also got to do with what’s called the birth–death model, because a good amount of job creation happens around new companies, and how many go out of business, how many are founded. And it’s just really hard. You can’t survey for that. You’ve got to have a model that predicts that. And it’s quite difficult to do, especially when the economy is undergoing big changes. And they’ve been working on that and are making progress on it. But, you know, the data we get is still well good enough for us to do our work. To the extent we have issues around data right now, it’s about low response rates. That’s happened all over—all over, really. Response rates are just lower to surveys now, both in and out of the government. And it’s no great secret. You know, we want higher response rates, and we need those to have, you know, less volatile data. And the way to get that is to make sure that the agencies that collect the data have sufficient resources to drive higher response rates. It’s not a complicated problem. But that’s what it takes. It’s not a mystery. That’s what it takes. The other thing I’ll say, Edward, is in the case of the job creation, the first—the response rate is quite low for the first month, or lower for the first month. By the time you get to the second or third month, you’re still collecting responses for that last month—for that prior month. And you get to the place where the data are much more reliable by the second, and certainly the third, month. So it’s not that we don’t get the data—it’s just that we get it a little later.

Question (Howard Schneider, Reuters): Thanks. Howard Schneider with Reuters. So, as you mentioned a minute ago, some margins of the job market would suggest that the slide’s already happening. The Black unemployment rate in August was above 7 percent, declining workweek, difficulty among college graduates finding work, high—rising youth unemployment. Why do you think a ¼ percentage point now is going to arrest that?
Answer: Well, I hadn’t say that I thought a ¼ point would make a huge difference to the economy. But you’ve got to look at the whole path of rates, right? And the market has already—has already been baking in expectations. I mean, our market works through expectations, right? So I think our policy path really does matter. And I think it’s important that we use our tools to support the labor market when we do see signs like that. I did mention that, you know, you see minority unemployment going up, you see younger people—people who are more vulnerable economically, more susceptible to economic cycles. That’s one of the reasons, in addition to just overall lower payroll job creation, that shows you that at the margin the labor market is weakening. I would also point to labor force participation. Some part of the significant decline in labor force participation over the last year has probably been cyclical in nature, rather than just the usual aging process. So we put all those together, and we see that the labor market is softening, and we don’t need it to soften any more, don’t want it to. So we use our tools. And, you know, it starts with a 25 basis point rate cut, but we—you know, the market’s also pricing in a rate path. I’m not blessing what the market’s doing at all. I’m just saying it’s not just one action.

Question (Andrew Ackerman, Washington Post): I also wanted to ask if you could share with us the conditions under which you might consider leaving the Fed in May.
Answer: I have nothing new on that for you today.