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As far as inflation fighting is concerned, the Fed is now officially not much different than the Bank of Zimbabwe.

Start buying gold.

Transcript of Chair Powell’s Press Conference Opening Statement
December 18, 2024
Page 1 of 4

CHAIR POWELL. Good afternoon. My colleagues and I remain squarely focused on
achieving our dual mandate goals of maximum employment and stable prices for the benefit of
the American people. The economy is strong overall and has made significant progress toward
our goals over the past two years. The labor market has cooled from its formerly overheated
state and remains solid. Inflation has moved much closer to our 2 percent longer-run goal.

We are committed to maintaining our economy’s strength by supporting maximum
employment and returning inflation to our 2 percent goal. To that end, today, the Federal Open
Market Committee decided to take another step in reducing the degree of policy restraint by
lowering our policy interest rate by 1/4 percentage point. We also decided to continue to reduce
our securities holdings. I will have more to say about monetary policy after briefly reviewing
economic developments.

Recent indicators suggest that economic activity has continued to expand at a solid pace.
GDP rose at an annual rate of 2.8 percent in the third quarter, about the same pace as in the
second quarter. Growth of consumer spending has remained resilient, and investment in
equipment and intangibles has strengthened. In contrast, activity in the housing sector has been
weak. Overall, improving supply conditions have supported the strong performance of the U.S.
economy over the past year. In our Summary of Economic Projections, Committee participants
generally expect GDP growth to remain solid, with a median projection of about 2 percent over
the next few years.

In the labor market, conditions remain solid. Payroll job gains have slowed from earlier
in the year, averaging 173 thousand per month over the past three months. The unemployment
rate is higher than it was a year ago, but at 4.2 percent in November, it has remained low.

December 18, 2024 Chair Powell’s Press Conference PRELIMINARY
Page 2 of 4

Nominal wage growth has eased over the past year, and the jobs-to-workers gap has narrowed.
Overall, a broad set of indicators suggests that conditions in the labor market are now less tight
than in 2019. The labor market is not a source of significant inflationary pressures. The median
projection for the unemployment rate in the SEP is 4.2 percent at the end of this year and 4.3
percent over the next few years.

Inflation has eased significantly over the past two years but remains somewhat elevated
relative to our 2 percent longer-run goal. Estimates based on the Consumer Price Index and
other data indicate that total PCE prices rose 2.5 percent over the 12 months ending in
November; and that, excluding the volatile food and energy categories, core PCE prices rose 2.8
percent. Longer-term inflation expectations appear to remain well anchored, as reflected in a
broad range of surveys of households, businesses, and forecasters, as well as measures from
financial markets. The median projection in the SEP for total PCE inflation is 2.4 percent this
year and 2.5 percent next year, somewhat higher than projected in September. Thereafter, the
median projection falls to our 2 percent objective.

Our monetary policy actions are guided by our dual mandate to promote maximum
employment and stable prices for the American people. We see the risks to achieving our
employment and inflation goals as being roughly in balance, and we are attentive to the risks on
both sides of our mandate.

At today’s meeting, the Committee decided to lower the target range for the federal funds
rate by 1/4 percentage point, to 4-1/4 to 4-1/2 percent. We have been moving policy toward a
more neutral setting in order to maintain the strength of the economy and the labor market while
enabling further progress on inflation. With today’s action, we have lowered our policy rate by a

December 18, 2024 Chair Powell’s Press Conference PRELIMINARY
Page 3 of 4

full percentage point from its peak, and our policy stance is now significantly less restrictive.
We can therefore be more cautious as we consider further adjustments to our policy rate.
We know that reducing policy restraint too fast or too much could hinder progress on
inflation. At the same time, reducing policy restraint too slowly or too little could unduly
weaken economic activity and employment. In considering the extent and timing of additional
adjustments to the target range for the federal funds rate, the Committee will assess incoming
data, the evolving outlook, and the balance of risks. We are not on any preset course.

In our Summary of Economic Projections, FOMC participants wrote down their
individual assessments of an appropriate path for the federal funds rate, based on what each
participant judges to be the most likely scenario going forward. The median participant projects
that the appropriate level of the federal funds rate will be 3.9 percent at the end of next year and
3.4 percent at the end of 2026. These median projections are somewhat higher than in
September, consistent with the firmer inflation projection. These projections, however, are not a
Committee plan or decision.

As the economy evolves, monetary policy will adjust in order to best promote our
maximum employment and price stability goals. If the economy remains strong and inflation
does not continue to move sustainably toward 2 percent, we can dial back policy restraint more
slowly. If the labor market were to weaken unexpectedly or inflation were to fall more quickly
than anticipated, we can ease policy more quickly. Policy is well positioned to deal with the
risks and uncertainties that we face in pursuing both sides of our dual mandate.

On a technical note, we lowered the offering rate on our overnight reverse repo facility to
align it with the bottom of the target range for the federal funds rate—its typical configuration.
Technical adjustments of this kind have no bearing on the stance of monetary policy.

December 18, 2024 Chair Powell’s Press Conference PRELIMINARY
Page 4 of 4

The Fed has been assigned two goals for monetary policy—maximum employment and
stable prices. We remain committed to supporting maximum employment, bringing inflation
sustainably to our 2 percent goal, and keeping longer-term inflation expectations well anchored.
Our success in delivering on these goals matters to all Americans. We understand that our
actions affect communities, families, and businesses across the country. Everything we do is in
service to our public mission. We at the Fed will do everything we can to achieve our maximum
employment and price stability goals. Thank you. I look forward to your questions.

https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20241218.pdf

That's nice Powell, but lenders are behaving otherwise.

AmericanKulak says

That's nice Powell, but lenders are behaving otherwise.

Mortgage rates went up instead of down on the fed news?

GNL says

Mortgage rates went up instead of down on the fed news?

Yes. Because Powell basically transmitted, "Suck and swallow inflationary cum, markets!"

GNL says

Mortgage rates went up instead of down on the fed news?

Happened a few months ago too.

Lender Vigilantism!