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

Question (Victoria Guida, Politico): Do you see the court case around Lisa Cook as being related to questions of Fed independence?
Answer: You know, I see it as a court case that it would be inappropriate for me to comment on.

Question (Stephanie Ruhle, MSNBC): Hi. Stephanie Ruhle, MSNBC. Treasury Secretary Scott Bessent has said that the Federal Reserve suffers from “mission creep” and institutional bloat. He’s now calling for an independent review. Would you support an independent review, or are you open to any sort of reform in any areas of the Fed?
Answer: I—of course, I’m not going to comment on anything the secretary says or, really, any other officer says. So in terms of reform at the Fed, you know, we just—we just went through a lengthy and I think very successful process of updating our monetary policy framework. I would say there’s a lot of work going on behind the scenes around the assets we have in the Federal Reserve System and at the Board. Are they the right size? We’re actually going through a 10 percent head count reduction through the whole Fed, including the Board and all the Reserve Banks. Employment at the Fed at the end of that will be basically at the same level it was more than 10 years ago. So we will have had zero job growth for more than a decade when we’re finished with that, and I think we’ll probably do more than that. So I think we’re certainly open to constructive criticism and ways to do our jobs better.

Question (Catarina Saraiva, Bloomberg): Hi. Catarina Saraiva with Bloomberg News. I just wanted to follow up on, you know, one of your answers just a couple minutes ago. You know, we’ve often heard you talk about how you and your colleagues, you know, do not think about politics, this does not enter the room. But one of your new colleagues does come from this world, right, where everything is seen through this framework of politics, and of what party is being helped. And that person is still employed by the White House. How can markets and the public interpret, you know, some of his speeches, for example, and then some of, you know, the forecast that we see today? I mean, the median for this year was moved because of the introduction of his forecast. I’m talking about the number of rate cuts seen this year. What do you, you know, what do you say to markets and the public that are trying to interpret, you know, what you guys are saying?
Answer: So there’s 12 voters—19 participants, of whom 12 vote, as you know, on a rotating basis. So no one voter, you know, can really—the only way for any voter to really move things around is to be incredibly persuasive. And the only way to do that, in the context in which we work, is to make really strong arguments based on the data and one’s understanding of the economy. That’s really all that matters. And that’s how it’s going to work. And I think that is the way the institution—that’s in the DNA of the institution. That’s not going to change.

Question (Matt Egan, CNN): Just a follow-up. This rate cut is coming at a time when the stock market is at or near all-time highs. And some valuation metrics are elevated historically. Is there a risk that cutting rates could overheat financial markets, potentially fueling a bubble?
Answer: You know, we’re tightly focused on our goals, right? And our goals are maximum employment and price stability. And so we take the actions that we take with an eye on those goals. Separately—and that’s why we did what we did today. Separately, we monitor financial stability very, very carefully. And, you know, I would say it’s a mixed picture, but households are in good shape, banks are in good shape. Overall, households are still in good shape in the aggregate. And I know that people at the lower end of the income spectrum are under pressure, obviously. But from a financial stability perspective, we monitor that picture. We don’t have a view that there’s a right or wrong level of asset prices for any particular financial asset, but we monitor the whole picture, really looking for structural vulnerabilities, and I would say those are not elevated right now.

Question (Jean Yung, MNI): Hi, Chair Powell. Jean Yung with MNI Market News. I wanted to ask about inflation expectations. You’ve said the Fed can’t take the stability of inflation expectations for granted. You mentioned at the short run they’ve gone up a little bit. I wonder if you can talk a bit about that. And then also at the long run, I’m wondering, do you see evidence that the debate over Fed independence and the growing deficit is putting pressure on inflation expectations?
Answer: So, as you said, shorter-term inflation expectations have tended to respond to near-term inflation, so if inflation goes up, inflation expectations will predict that it takes just a little while to get back down. Fortunately, throughout this period, longer-term inflation expectations, both breakeven in the markets and almost all of the longer-term surveys—Michigan being a bit of an outlier lately—have been just rock solid in terms of, you know, running at levels that are consistent with 2 percent inflation over time. So we don’t take that for granted. We actually assume that our actions have a real effect on that, and that, you know, we need to, you know, continually show and also mention/discuss our commitment to 2 percent inflation. And so you’ll hear us doing that. But, you know, we’re—as I mentioned, it’s a difficult situation because we have risks that are both affecting the labor market and inflation. Those are our two goals. And so we have to balance those two. When they’re both at risk, we have to balance them, and that’s really what we’re trying to do. I don’t— the latter part of your question was about independence. You know, I don’t see market participants—I don’t see that that’s something they’re factoring in right now in terms of setting interest rates. Thanks very much.