jerome h powell : economic outlook speech by mr jerome h powell, chair of the board of governors of the federal reserve system, to the world affairs council, the federal reserve bank of dallas and the dallas regional chamber, dallas, texas, 14 november 2024. * * * good afternoon. thank you to the world affairs council, the federal reserve bank of dallas, and the dallas regional chamber for the kind invitation to be with you today. i will start with some brief comments on the economy and monetary policy. looking back, the u. s. economy has weathered a global pandemic and its aftermath and is now back to a good place. the economy has made significant progress toward our dual - mandate goals of maximum employment and stable prices. the labor market remains in solid condition. inflation has eased substantially from its peak, and we believe it is on a sustainable path to our 2 percent goal. we are committed to maintaining our economy's strength by returning inflation to our goal while supporting maximum employment. recent economic data economic growth the recent performance of our economy has been remarkably good, by far the best of any major economy in the world. economic output grew by more than 3 percent last year and is expanding at a stout 2. 5 percent rate so far this year. growth in consumer spending has remained strong, supported by increases in disposable income and solid household balance sheets. business investment in equipment and intangibles has accelerated over the past year. in contrast, activity in the housing sector has been weak. improving supply conditions have supported this strong performance of the economy. the labor force has expanded rapidly, and productivity has grown faster over the past five years than its pace in the two decades before the pandemic, increasing the productive capacity of the economy and allowing rapid economic growth without overheating. the labor market the labor market remains in solid condition, having cooled off from the significantly overheated conditions of a couple of years ago, and is now by many metrics back to more normal levels that are consistent with our employment mandate. the number of job openings is now just slightly above the number of unemployed americans seeking work. the rate at which workers quit their jobs is below the pre - pandemic pace, after touching historic highs two years ago. wages are still increasing, but at a more sustainable pace. hiring has slowed from earlier in the year. the most recent jobs report for october reflected significant effects from hurricanes and labor strikes, making it difficult to get a

have seen some severe temporary disruptions. there was a series of short intervals in which the trade in us treasuries was disrupted. that ’ s a sign of considerable nervousness in the markets. besides the markets, we are closely monitoring the situation of banks in europe. we have taken measures to prevent banks from having to overly restrict their lending during the crisis. but the pressure on banks will intensify if economic conditions deteriorate. we are also closely watching investment funds. what is happening there? up to now we have only seen isolated capital outflows but we need to keep an eye on that. in the 1 / 4 bis central bankers'speeches event of large outflows from investment funds, the main concern would be to prevent an excessive fall in prices caused by fire sales – that is, distressed sales of assets at large price discounts. on sunday, the world ’ s central banks decided on extensive coordinated measures. the ecb announced a first major package on thursday. what is the point of all that if the financial crisis has not yet set in? the situation in financial markets is already very tense. last thursday, we decided to provide abundant and very cheap liquidity to the banking system. that is the primary task of central banks at present. on sunday, in a coordinated effort with other major international central banks, we took measures to provide banks with cheap us dollar liquidity. we did so because banks in some countries, especially japan, had been finding it harder to access us dollars. the us federal reserve slashed interest rates. the ecb stepped up its asset purchases. but none of this seems to have had the desired effect. equity prices continued to fall. what is going wrong? the ecb ’ s package was very comprehensive. but market volatility is partly masking the effects. moreover, not all market participants seem to have immediately understood all of the components of the programme. the additional net asset purchases in particular will help to counter the self - reinforcing dynamics on the bond markets. we are helped by the operational flexibility of the asset purchase programme, which we are already using to its full extent. so did the ecb communicate poorly? the key message of the programme should be clear. the ecb stands ready to do everything within its mandate to counter market disruptions that impair the transmission of its monetary policy, because monetary policy cannot otherwise be effective. this is the unanimous decision of the governing council. is it perhaps the case