Fed meeting live coverage: Federal Reserve cuts interest rates by 0.25%, Powell says there's 'no risk-free path'
View original at finance.yahoo.comFed meeting live coverage: Federal Reserve cuts interest rates by 0.25%, Powell says there's 'no risk-free path' The Federal Reserve cut interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday, marking the central bank's third cut of the year…
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Powell came across calm rather than edgy in tone, suggesting he is comfortable and in charge rather than on the ropes as in October
80% confidenceAI impact on jobs is probably part of the story but not a big part yet, and we don't know whether it will be
80% confidenceThe federal funds rate is 3 percentage points too high
80% confidenceThe Fed's obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem
80% confidenceIt's really tariffs that are causing most of the inflation overshoot
80% confidenceThe central bank expects the tariffs to represent a one-time increase in prices, and their job is to make sure that it is
80% confidenceUnemployment insurance claims are not rising while job finding rates are low, which is a little bit curious
80% confidenceCompanies are making big announcements of layoffs and saying they're not going to hire anybody for a long time, citing AI
80% confidencePowell doesn't expect a rate hike in January
80% confidenceThe labor outlook remained dismal according to consumer sentiment survey
80% confidenceA reasonable base case is that the effects of tariffs on inflation will be relatively short-lived, effectively a one-time shift in the price level
80% confidenceA 25 basis point decline in the federal funds rate won't make much of a difference for people in the housing market
80% confidenceThe take on productivity and growth is very risk-friendly, and the Fed chair suggests productivity may be running about 2%, allowing the economy to grow faster without generating excess inflation
80% confidenceTrump will use a willingness to cut rates as a litmus test for his pick for next Fed chair
80% confidenceThe Fed will need to be careful in assessing household survey data due to distortions from the government shutdown
80% confidencePowell sounded very upbeat on productivity and growth, including AI effects
80% confidenceThe statement signaled a pause from here, noting that the FOMC will now consider the extent and timing of additional adjustments to the target range
80% confidenceUS economy will improve in 2026 due to consumer spending holding up, AI spending on data centers, and supportive fiscal policy
80% confidenceThe Fed is killing growth because they're so afraid of inflation
80% confidenceHousing is going to be a problem. We can raise and lower interest rates, but we don't really have the tools to address a structural housing shortage
80% confidenceA rate hike is not anybody's base case at this point
80% confidenceLow housing supply and favorable mortgage rates during the pandemic era are keeping people in their homes and creating significant challenges
80% confidencePrevious cycles of tech innovation have generally seen some jobs destroyed and others created, and when you get through it, you have higher productivity and enough jobs for people
80% confidenceThere is no risk-free path for policy as the Fed navigates tension between employment and inflation goals
80% confidenceThe 0.25% rate cut is a rather small number that could have been doubled, at least doubled, and rates should be much lower
80% confidenceThe baseline would be solid growth next year
80% confidenceThe FOMC still expects one more interest rate cut next year, but the range of projections is unusually wide. The Fed is unlikely to cut again until after a new Chair replaces Jerome Powell in May
80% confidenceSome people feel we should stop here and wait, some feel like we should cut once or more this year and next year
80% confidenceFed Chair Powell is a 'stiff' and 'dead head'
80% confidence
Data points we hold from this source
| Federal Reserve · unemployment rate forecast | 4.4 percent |
| Federal Reserve · core pce inflation forecast | 2.5 percent |
| Federal Reserve · productivity growth | 2 percent |
| Federal Reserve · gdp growth forecast | 2.3 percent |
| Federal Reserve · 30 year mortgage rate | 6.0 percent |