Federal Reserve press conference, 2024-07-31 — Chair Jerome Powell

Question (Rachel Siegel, Washington Post): Hi, Chair Powell. Rachel Siegel from the Washington Post. Thanks for taking our questions. On inflation, do the past few months of good reports look like what we saw last year, where you really had a lot of momentum, with a few bumps in between? Would you characterize that kind of momentum as back on track at this point in the year?
Answer: Actually, what we’re seeing now is a little better than what we saw last year. Last year, as we pointed out late in the year, a whole lot of the progress we saw last year was from goods prices, which were going down at an unsustainable rate, disinflating at an unsustainable rate. This is a broader disinflation. This has goods prices coming down, but it’s also—we’re also now seeing progress in the other two big categories: nonhousing services and housing services. So, you know, the thing is, we’ve only—you’ve got one quarter of that. We had seven months of low inflation; you got one quarter of this. I would say the quality of this is, is higher, and it’s good, but so far, it’s only a quarter. So I think, you know, we need to see more to know that we’re—to have more confidence that we’re on, on a good path down to 2 percent. But as I mentioned, our confidence is growing because we’ve been getting good data. And things like the ECI report and, frankly, the softening in the labor market conditions, you know, give you more confidence that the economy’s not overheating. It doesn’t look like an overheating economy, and it looks like an economy that’s normalizing.

Question (Jo Ling Kent, CBS News): Thank you. Jo Ling Kent with CBS News. Chair Powell, thanks for taking our questions today. You have consistently said that the Fed does not consider politics in making decisions. With a possible September rate cut on the table, it would be less than two months before the election, and former President Trump reportedly said that cutting rates so close to the election is something the central bank knows “they shouldn’t be doing.” What’s your response, and do you believe it’s possible to really remain apolitical with a September rate cut?
Answer: I absolutely do, and I think it’s—first of all, we haven’t made any decisions. I would say it this way: haven’t made any decision about any future meeting. I don’t know what the data will reveal or how that will affect the appropriate path of our policy. I really don’t know. I do know how we will make that assessment. That’s what I do know. So if you take a step back, the current situation, again, is inflation has come down much closer to our goal, and that’s happened while unemployment has remained low. We’re, we’re very tightly focused on using our tools to try to foster that state of affairs continuing. That’s at each of our meetings and all of our decisions, our focus is strictly on that and really on nothing else—doing our part, whatever that part may be. You know, we’re using our best thinking. We’re doing our best to understand the economy. We, we follow academics. We follow the many commentators who bless us with their commentary [laughter], but we don’t change anything in our approach to address other factors, like the political calendar. Congress has, we believe, ordered us to conduct our business in a nonpolitical way at all times, not just some of the time. I’ll say this, too: We never use our tools to support or oppose a political party, a politician, or any political outcome. The bottom line is, if we do our very best to do our part and we stick to our part, that will benefit all Americans. If we get it right, the economy will be stronger. We’ll have price stability. People will find jobs. Wages will rise in real terms. Everyone will benefit. So that’s what we believe, and that’s how we will always act. This is my fourth presidential election at the Fed. I can tell you this is how we think about it. This is what we do. So anything that we do before, during, or after the election will be based on the data, the outlook, and the balance of risks and not on anything else.