Federal Reserve press conference, 2024-11-07 — Chair Jerome Powell

Question (Edward Lawrence, Fox Business): Thanks, Chair Powell. So with, with this noise in the jobs reports that we’ve seen and you look at the Fed’s favorite inflation, PCE inflation, overall it’s 2.1 percent—very close to the Fed’s target—but core inflation is 2.7 percent, and it’s been that way since July. So why doesn’t this data give fuel to a rate pause for this meeting?
Answer: Well, so I think if you look at the 3- and 6-month—you’re quoting the 12-month. So we look at all of them, right?

Question (Craig Torres, Bloomberg): Hi, Chair Powell. Craig Torres from Bloomberg. Two questions today. Did you learn anything about what Americans think about the economy from the election results? First question. Second question—I want to talk about some labor market indicators, and I do so with great respect for your attentiveness to the maximum-employment side of the mandate, Chair Powell. So the unemployment rate has been at 4 percent or higher for six months. One of the broadest measures of unemployment is up about a half a point from a year ago. Compensation gains are sliding back. The quits rate, a signal of labor market dynamism, has been heading down to that bad neighborhood of the 20-teens. So you have put a marker at Jackson Hole saying any “further cooling” is unwelcome. It is cooling, generally, a little bit further. So at what point do we reach what you would describe as a shortfall from maximum employment? Thank you.
Answer: Sure. So on your first question, I’m not going to talk about anything that relates directly or indirectly to the election. On the second one, you’re—you know, this is the great question, and it’s the one we think about all the time. So I’ll just say a couple things. You know, there’s nothing really surprising here. What we know is that the unemployment rate is low. We also know that it’s come down significantly—sorry, moved up significantly from a year or so ago. So we’ve seen a big change upward in unemployment. Sometimes that has meant bad things. So far, it doesn’t appear to be. It appears that the—I wouldn’t say that the labor market has fully stabilized, because I do think it’s continuing to very gradually cool, but it seems to be in a good place. And our policy, of course, is designed to keep it in that good place, to maintain the strength in the labor market, while also enabling further progress on inflation. You know, you mentioned a bunch of, of indicators, and you’re right. You know, the, the openings to unemployment rate is back to a normal level. I would—I would characterize it more broadly as “normalizing.” You mentioned wages. Wages are still running just a bit above where they would need to be to be consistent with 2 percent inflation, unless productivity is going to remain at this high level. If we see the—if we see productivity, you know, more sustainably at these high levels, then that would sustain higher wage gains. So I would say—in fact, you can say it the other way, that, that wage increases are now consistent with 2 percent inflation given current productivity readings. But, of course, you know, the lore on productivity readings is whenever you see high readings, you should assume they’re going to revert pretty quickly to the longer-term trend. That has always been the case for 50 years. But, you know, it may be that—we’re now five years. If you look at the NIPA revisions that came out a month ago, we’re five years into, into a nice set of productivity readings, which are sustained and very healthy. But, overall, it’s a good labor market. We could talk about 20 different data series. We’ll be looking at all of them, of course. But, you know, we don’t want the labor market to, to soften much from here. We don’t think we need that to happen to get inflation back to 2 percent.

Question (Victoria Guida, Politico): Hi. Victoria Guida with Politico. Some of the President-elect’s advisers have suggested that you should resign. If he asked you to leave, would you go?
Answer: No.

Question (Michael McKee, Bloomberg): To follow up on the areas of caution, if there were black clouds on the horizon that you identified as something you’re watching, what would they be?
Answer: I think it’s—you know, it’s things like—clearly, geopolitical risks around the world are elevated, and just as clearly, they’ve had relatively little effect on the U.S. economy. Now, that can change through the price of oil or otherwise, but people talk about those as, you know, something that’s on the horizon all the time. But, you know, ultimately, if you look at the U.S. economy, its, its performance has been very good. And that’s, that’s what we hear from businesspeople, an expectation that that will continue. If anything, people feel next year—I’ve heard this from several people—that next year could even be stronger than this year.

Question (Courtenay Brown, Axios): Hi, Chair Powell. Courtenay Brown from Axios. In response to Howard’s question, you said it wasn’t an ideal time to give forward guidance because of the economic uncertainties. Can you lay out what some of those uncertainties are and whether or not it includes some of the proposals that the President-elect has put out on the campaign trail— tariffs, for instance?
Answer: No. I was not referring to, to the new Administration’s policies at all, nor will I today. So I—what I’m just saying is, as we look ahead, we know—and I mentioned this in my statement—that the risks are two sided. I guess I should start by saying that we think that the economy and we think our policy are both in a very good place, a very good place. And—but as you look forward, you say, “What are the risks?” And one risk is that we would move too quickly and find ourselves having moved too quickly, and inflation comes back, and we—and we lost our chance to get inflation back to 2 percent. So we have to avoid that risk. And that, that—to avoid that risk, that means you want to move carefully. The other risk is that we move too slowly and that we allow the labor market to weaken too much and do unnecessary damage to the labor market and to people’s working lives. That, that says, “Don’t get behind the curve.” So these are two—these two things are the two risks that we have to manage. And so we’re, we’re in the middle there. We try to be in the middle and deal with both of the—manage both of those. Again, the idea is to maintain support, the strength that we have in the labor market and in the economy, but also with somewhat less restrictive but still restrictive policy, enable further progress toward our 2 percent inflation goal. And so there’s—you know, there— this is the thing: Meeting by meeting, we’re going to be making our assessment of what the right path is. You know, it’s not as important—the precise timing of these things is not as important as the overall arc of them, and the arc of them is to move from where we are now to a sense of neutral, a more neutral policy. We don’t know exactly where that is; we only know it by its works. We’re pretty sure it’s below where we are now. But as we move further, there will be more uncertainty about where that is. And we’re going to move carefully as, as this goes on so that, you know, we can increase the chances that we will get it right.

Question (Kelly O’Grady, nan): And just a quick follow-up—President-elect Trump has been critical of your performance. Any concern about his influence on the Fed’s independence?
Answer: I’m not going—I’m not going to get into the—any of the political things here today, but thank you.