Fed Chair Powell (Q&A) says towards the next meeting (October 29th) will look at labour market, growth data, inflation data to ask if policy in right place

NEXT MEETING:

• Towards next meeting will look at labour market, growth data, inflation data to ask if policy in right place
• If policy not in right place we'll move it there
• Policy path is difficult, Fed had to make a compromise
• Must look at both goals equally
• We need a policy that covers a range of plausible outcomes

LABOUR MARKET:

• Still sees downside risks in the labour market
• Over the summer labour market has softened
• Hiring rate has really dropped, not hiring may be one way of passing on tariff costs
• Lots of questions around whether AI is behind the low hiring rate for recent grads, cannot say AI is the main reason
• Aggregate national hiring rate is at a low low level
• Companies have slowed hiring to see how policies shake out
• Supply side changes to job market have a lot to do with immigration

INFLATION:

• Focus on inflation needs to moderate to a more balanced approach
• Inflation coming into better balance

ECONOMY:

• Beige Book showed modest growth, economy growing but not fast
• In aggregate households are in good shape
• Businesses are not sure about investment, hiring environment

FINANCIAL STABILITY:

• Not a time of elevated financial stability risks
• Fed is not targeting prices for financial assets
• Equity prices are fairly highly valued

TARIFFS:

• Powell notes that the Fed sees tariffs to be a one-time passthrough, finished by end of next year
• Powell says that it looks like middle group absorbing tariffs, not passing much on to consumers
• The tariff pass through to consumers has been later and less than expected

FED INDEPENDENCE:

• Fed never take politics into account