Back

SUMMARY OF FED CHAIR POWELL'S SPEECH (9/17/25): 1. Unemployment rate has risen along with downside risks to employment 2. Inflation has risen and remains "somewhat elevated" 3. Growth in economic activity has "moderated" 4. Job creation rate is "below the breakeven rate" to avoid rising unemployment 5. Near-term inflation expectations have moved up on tariffs 6. Effects of tariffs on economy "remain to be seen" The Fed was clearly forced to cut rates due to a weak labor market. FOMC PRESS CONFERENCE - 18th Sept 2025, 2am SG Time Fed cuts rate by 25bps point to new range of 4.00% - 4.25%. - ⁠6 official want no more rate cut in 2025, 9 officials want two more cuts and one official projects five more quarter points cuts this year. - ⁠9 out of the 19 participants indicated just one more cut this year, while 10 saw two more cuts. - ⁠One Fed official didn’t want any rate cut this year including today’s. - ⁠Balance of risk has moved. - ⁠Downside Risk to Unemployment have risen. - ⁠Job gains have slowed, unemployment has edged up. - ⁠Economic activity has moderated. - ⁠Inflation has moved up, somewhat elevated. - ⁠Median projections see two more cuts this year with one cut in 2026 and one in 2027. - ⁠*Massive disagreement amongst Fed officials about cuts this year.* - ⁠2025 GDP projection is up to 1.6% from 1.4%. - ⁠Unemployment rate forecast remains unchanged for 2025 at 4.5% - ⁠5 Fed officials see neutral rate below 3% in 2026. - ⁠Median expectation for 2026 unemployment rate was lower than in June (4.4% from 4.5%). - ⁠Median expectation for core PCE inflation in 2026 rose to 2.6% from 2.4% in June. - ⁠Core inflation rate unchanged at 3% this year Speech Summary: * ⁠Job gains have slowed. * ⁠Inflation has risen recently and remains somewhat elevated. * ⁠Recent indicators suggests growth of economic activity has moderated. * ⁠Activity in the housing sector remains weak. * ⁠Marked slowing in both supply of and demand for workers is unusual. * ⁠Higher Tariffs have begun to push up prices in some categories of goods. * ⁠*Strongly committed to maintaining Fed independence*. * ⁠Risks between two goals have moved meaningful towards greater equality. * ⁠What’s happening in the labour market has more to do with immigration rather than tariffs. * ⁠Moderation of growth mainly reflects slowing in consumer spending. * ⁠Pass through of tariffs into inflation had been slower and smaller. * ⁠Disinflation appears to be continuing for services. * ⁠*Fed is certainly open to constructive criticism and ways to do our jobs better.* * ⁠Tariffs are mostly being paid by the companies that sit between exporter and consumers. * ⁠There are no Risk- Free paths now.