Federal Reserve press conference, 2019-03-20 — Chair Jerome Powell

Question (Martin Crutsinger, Associated Press): Marty Crutsinger with the Associated Press. With the new dot plot today, you’ve gone from two rate hikes in 2019 to zero. You still have one showing for next year. The fed funds futures trading, as has been alluded to, is showing rate cuts at the end of this year. Are they—is that a possibility in your mind, given the sharp change you’ve made at this meeting?
Answer: As I mentioned, the data that we’re seeing are not currently sending a signal which suggests moving in either direction for me, which is really why we’re being patient. We feel our policy rate is in the range of neutral. The economy is growing at about trend. Inflation is close to target. Unemployment is under 3 percent.1 It’s a great time for us to be patient and watch and wait and see how things evolve.

Question (Matthew Boesler, Bloomberg): More generally, to the extent that wage growth in excess of interest rates allows households to pay down debt faster, whereas interest rates in excess of wage growth risks a further buildup in debt, how do you account for the sort of financial stability consequences of varying interest rates relative to wage growth?
Answer: I don’t think we look at—I understand what you’re asking, but we’re looking at—our mandate is price inflation and maximum employment, and that’s what we’re looking at with setting interest rates. And we also monitor financial stability very carefully across all meaningful asset categories. I don’t think we tie it particularly to the relationship you’re talking about.