저자: 제롬파월 · 외국인
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파월 의장은 연준 독립성이 경제 성장과 물가안정에 필수적이며, 최근 법적 공격으로 위협받고 있다고 주장. 금리는 3.50~3.75%로 동결, 중동 분쟁·관세로 인한 에너지·물가 상승으로 인플레이션이 목표보다 높음(PCE 3.5%, 근원 3.2%). 금리 인하 편향 문구 유지에 위원 간 이견이 커졌음을 시사. 본인은 워시 후임 인준 후에도 이사직을 당분간 유지할 예정이라고 밝힘.
다듬은 글
To follow up on some of the the discussion around Fed [clears throat] independence, can you explain to the public why this notion of Fed independence, which might sound kind of wonky to some, is so critical? I mean, what are the consequences if either the Supreme Court rules against Lisa Cook or the Fed in the future decides to make decisions more around the political calendar instead of the economic data?
So, every major advanced economy in the world has made the same decision the United States has made. And that is that they want to take the making of monetary policy, the setting of interest rates to support the economy to achieve maximum employment and price stability. They want to take that out of the direct control of elected politicians.
And the reason is elected politicians are always running for election and they'll always want low rates and that will re- lead to inflation over time. So, after, you know, literally centuries of experience with that, the whole world moved to the different model and it's it's worked great. this is this is the era in which inflation was under control for 40 years.
Then we had the pandemic inflation everywhere on the in the world and now we have inflation that had gone pretty much all the way back to target really close to all the way back to target and now is being buffeted by the energy shock in the US buffeted by the by the tariff shock as well. So, but what I would say to the general public is that's that's the backstory is that um it it don't think of about it an institution being independent.
Think about it this way that you want people to make monetary policy and set interest rates to benefit the general public and it try to achieve economic goals, which are maximum employment and price stability and focus only on that and ignore political considerations completely ignore them. It's This isn't bipartisan.
Good afternoon. Uh my colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefits benefit of the American people. The US economy has been expanding at a solid pace. While job gains have remained low, the unemployment rate has been little changed in recent months.
Inflation has moved up and is elevated in part reflecting the recent increase in global energy prices. Today, the FOMC decided to leave our policy rate unchanged. We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2% inflation goals. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook and we will remain attentive to risks to both sides of our dual mandate.
I'll have more to say about monetary policy after briefly reviewing economic developments. Recent indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient and business fixed investment has continued to expand at a brisk pace. In contrast, activity in the housing sector has remained weak.
In the labor market, the unemployment rate was 4.3% in March and has changed little in recent months. Job gains have remained low. A good part of the slowing in the pace of the job growth over the past year reflects a decline in the growth of the labor force due to lower immigration and labor force participation, though labor demand has clearly softened as well.
Other indicators, including job openings, layoffs, hiring, and nominal wage growth generally show little change in recent months. Inflation has moved up recently and is elevated relative to our 2% longer-run goal. Estimates based on the consumer price index and other data indicate that total PCE prices rose 3.5% over the 12 months ending in March, boosted by the significant rise in global oil prices that has resulted from the conflict in the Middle East.
Excluding the volatile food and energy categories, core PCE prices rose 3.2% over the 12 months ending in March. This relatively high rate largely reflects the effects of tariffs on prices in the goods sector. Near-term measures of inflation expectations have risen this year, likely because of the substantial rise in oil prices.
Most measures of longer-term expectations remain consistent with our 2% inflation goal. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today's meeting, the committee decided to maintain the target range for the federal funds rate at 3 and 1/2 to 3 and 3/4%.
The economic outlook remains highly uncertain and the conflict in the Middle East has added to this uncertainty. In the near term, higher energy prices will push up overall inflation. Beyond that, the scope and duration of potential effects on the economy remain unclear, as does the future course of the conflict itself.
We will continue to monitor the risks to both sides of our dual mandate. We are well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving outlook, and the balance of risks. Monetary policy is not on a preset course and we will make our decisions on a meeting by meeting basis.
[clears throat] This is my last press conference as chair and I will close with a few thoughts. First, I want to congratulate Kevin Warsh on his advancement out of the Senate Banking Committee this morning. This is an important step forward and I wish him well as that process continues. The Federal Reserve exists for one fundamental purpose, to foster the economic conditions in which American families and businesses can thrive.
Stable prices, a strong job market, and a financial system they can depend on. Every decision we make, whether about interest rates or regulatory and supervisory matters or other issues, is made in service of that purpose. Our decisions reflect the collective judgment of the Board of Governors and the Federal Open Market Committee, colleagues who demonstrate analytical rigor, principled judgment, and a genuine commitment to the public interest.
Our collaborative and deliberative process has long reflected a shared commitment to finding common ground in service to our mission. This institution is resilient, capable, and staffed by professionals of extraordinary talent and exceptional dedication. It has been a privilege to serve alongside so many great public servants at the Board of Governors and around the Federal Reserve System.
The Fed's work is only as effective as the public's understanding of it and you, the press, are essential to keeping the public informed about we about what we do and why. The people we serve benefit from your careful reporting. I welcomed the announcement [clears throat] last Friday by the US attorney for the District of Columbia that she had closed the criminal investigation.
She also noted, however, that she would not hesitate to restart the investigation. Over the weekend, the Department of Justice provided assurances that they will not reopen the investigation unless there's a criminal referral from the Fed's Inspector General. And, absent such a referral, if they do appeal the recent court decision, they would not seek as part of that appeal to restart the investigation or send new subpoenas.
[clears throat] I've said that I will not leave the board until this investigation is well and truly over with transparency and finality and I stand by that. I'm encouraged by recent developments and I'm watching the remaining steps in this process carefully. My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve.
After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined. I plan to keep a low profile as a governor. There is only ever one [clears throat] chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.
Once sworn in as Board Chair, his new colleagues will elect him to chair the FOMC as well. As I regularly point out from this podium, our success in delivering our goals matters for all Americans. I'm confident that the that the Fed will continue to do its work with objectivity, integrity, and a deep commitment to serve the American people.
Thank you and I look forward to your questions. [cough and clears throat] Thank you, Mr. Chair. Appreciate the kind words about the press. It often doesn't come from the podium in different places, but appreciate that. Um can you talk about what has gone into your decision to remain on the board? What kind of criteria are you weighing and how long might you stay?
Thank you. Sure. So, you know, [clears throat] my my concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors. And I I want to note here, this has nothing whatever to do with verbal criticism by elected officials.
Uh I I've never suggested that such ver- verbal criticism is a problem and neither has anyone else here. But these legal actions by the administration are unprecedented in our 113-year history and there are ongoing threats uh of additional such actions. I I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors.
It is so important for our economy, for the people that we serve, that they can depend over time on a central bank that operates that way, free of political influ- influence. It's part of the absolute foundation of this amazing economy that we have. It's just one of the many reasons why the US economy is the envy of the world.
That piece of institutional architecture separates successful countries from unsuccessful countries. It is extremely important, not for the people who work at the Fed in any given time, but for the people that we serve, that the Fed remain able to conduct monetary policy in a way that doesn't get pulled into politics trying to help or hurt any particular politician or political party.
It's critical for the people that we serve. In terms of when I would leave, I I will leave when I when I think it's appropriate to do so. Was that all your questions or was that Well, I just have a follow-up, which is what what would [clears throat] you say to the criticism that by remaining on the board, you're actually taking a political act in denying uh President Trump the majority of the board, which as president he would have if you left?
I don't see that at all. As I mentioned, uh you know, I'm literally staying because of the actions that have been taken. I had long planned to be retiring. Uh and uh you know, the things that have happened in the real in the last 3 months have I think left me no choice but to stay until until I see them through at least that long.
Um you know, in addition, uh I don't see how this will interfere. My intention is not to interfere. You know, I was a governor for almost 6 years. And the tradition is at the Fed that governors uh who understand how difficult the role of chair is, and as a as a soon-to-be former chair, I do understand how hard it is to get consensus with 19 strong-minded people, you work with the chair.
You you try to you try to uh be heard, but also collaborate with the chair and try to support the chair when you can. When you can't, you can't. And I think that's the attitude that people generally take, and that's the attitude that I'll take. Uh Nick. Uh Chair Powell, if I could ask about the inflation outlook, in March you described the standard practice of looking through energy shocks as conditional on inflation expectations staying anchored.
Since that meeting, there has been very little progress reopening uh key energy trade corridors. Can you help us understand how the inflation outlook has changed in the intervening period beginning with the prospects for tariff pass-through resolving on the timeline that you had outlined in March before getting to the energy shock that is now on top?
So, you know, uh I would look at it this way. Um for a long time we've been working on on the hypothesis, really, that tariff tariffs would would lead to a one-time price increase, and that that would go away over time. In other words, that there would be no further change, so measured inflation wouldn't sort of the textbook, you you would look through it an oil shock because they tend to be short-lived and they tend to revert.
And monetary policy works with long and variable lags, so you you know, you wouldn't necessarily react right away. I think that is all the more true given that we're several years above 2% inflation, and that we're already looking through the tariff shock. So, I think we're going to be very cautious about that.
It's But the the question about looking through energy really is not not in front of us right now. We it hasn't even peaked yet. And I think we'd want to see the backside of that and progress on tariffs before we even thought about uh about reducing rates. So, if I [clears throat] could follow up, the the statement today preserves language that has taken on some meaning uh as it was socialized when the committee was actively lowering rates.
Why is that easing bias still uh ripe given how different the inflation outlook is now versus a meeting or two ago? And what more would have [clears throat] to happen for it to get evicted? So, um that was uh as you will recall, we we had a discussion about that at the last meeting, and we talked about it in in the press conference after the March meeting.
We had the same today. We had quite a vigorous discussion about that that very issue and the guidance, and is it still appropriate, that kind of thing. And I would say that the, you know, number of people on the committee who either could support that language change changing to a more neutral stance so that a hike is as likely as as a cut, uh that number has increased over the intervening period, and it's easy to see why.
I mean, it's it's it's it's a good question, right? You see inflation has moved up over the interim a bit. Core inflation's 3.2 now, moving albeit just a little bit in the wrong direction. And we we know that there will be you know, that there's uh headline inflation coming out of the Gulf, and we don't know how much that will be.
We just we're going to need to see. So, it makes all the sense in the world that people would look at that, and and we'd have a vigorous discussion about that. You saw the three people dissenting over the language. I think all of those people agreed with the with the rate decision. Um so, the majority of the committee did not want to do that, and and and I was I didn't think we needed to do it at this meeting.
It really was just a question of what's why do we need to do that now? You know, we have so much to learn. There's so much uncertainty about the path ahead. There doesn't need to be any rush to make that decision now because you know, what what happens in the next 30, 60 days, even by the next meeting, could really change the picture around that around that language.
So, you know, it was a it was a it's a close it's it's a much closer thing on the committee than it was in March. And you know, that makes all the sense in the world, it seems to me. Claire. So, I'm Claire Jones, Financial Times. Um just just going back to this issue with the the easing bias, um we've now got oil approaching $120 a barrel when it comes to the benchmark.
Um Brent crude. Um if it stays around those levels 6 weeks from now, what would be your guess best guess as to whether the easing bias will still be in the statement? Thank you. I I wouldn't want to guess. You know, well, first of all, we're going to have new leadership in all likelihood by then, and and new leadership's going to have a very important role to play in that, so uh I won't be standing here at this podium to answer your question, so um I don't know.
As I mentioned, that's all I can really say is that we had we had a great discussion about that today. It's a you know, it's got it's gotten to be a better question in the interim period. We had the discussion. A majority are still on the page of of not feeling the need to move to that level, and I I that's where I am.
Uh I I get it, though. You know, at a certain point you would move, and that that conceivably could come as soon as the next meeting. Thank you. Just to follow up, um [clears throat] the new leadership also seem rather lukewarm on press conferences and on the dot plots. What would your advice to him be on these communication tools?
So, I'm I'm not going to give him any advice through you today here, but I've you know, I I think communications generally is I think every incoming chair takes a look at communications, and it's a very healthy thing. I mean, communications is it's very complex, and uh you know, you can always be be looking at new things.
And if that happens, feels like it's going to happen, that's completely appropriate thing. Neil. Hi, Chair Chair Powell, Neil Irwin with Axios. [clears throat] Um can you tell us if you've been in touch with with incoming Chairman Warsh? Uh any to what extent is this a normal transition process versus all the things swirling around something unusual?
And and what can we expect when when he takes takes that podium in a few weeks? I I haven't seen him since seeing him at a dinner in January, where I congratulated him and had a nice nice chat with him. Haven't seen him. I don't know what a normal process is. You know, the the last process was with Janet Yellen, who with whom I had worked for 6 years, and so it was uh you know, we were sitting down the hall from each other, so it was a very different thing.
I think I think this is and will be a very normal, standard kind of a kind of a transition process. So, that's that's what I expect. I have every reason to think it will be. Quick follow-up, is the Supreme Court ruling on Governor Cook a factor in when you may leave as a governor? I wasn't thinking of it as such, but no, not really.
I mean, I'm thinking more of the other things I mentioned. [clears throat] Chris. Hi. Thanks for taking our question. I wanted to ask a question about your tenure, and I'm Chris Rugaber at Associated Press. Um during your tenure as chair, you often spoke about how disadvantaged Americans benefited from extended periods of low unemployment.
Uh in the new framework the Fed adopted in 2020, some economists say elevated the Fed's employment mandate. Uh are you worried that the the pandemic inflation spike that followed will make future Fed chairs more reluctant to pursue a hot jobs market, and should they be? Um I don't know the answer to that.
I mean, what we So, what we experienced um in in the in the teens, the mid-teens, was uh really low low levels of unemployment for a long period of time, and no reaction from inflation. And we all took very much took notice of that. We also noticed that the biggest wage gains were going to people at the bottom end of the income spectrum.
And we had many, many reports of uh I mean, it felt like a fairly stable equilibrium, and a lot of benefits were flowing to people at the bottom end of the uh income spectrum, including companies were, you know, setting up in in you know, people who were confined, and and like training them before they got out, and it was it was a very healthy sort of set of societal dynamics.
So, of course, I think anybody would love to get back to that. Um I I don't think that anything that happened to create the the global pandemic inflation was in any any way related to overweighting the employment market. I mean, it was it was a global shock that it happened essentially very, very similarly all over the world.
It had to do with closing, reopening, stimulus, and all that. And I mean, you could you could look at it a graph of 10 big economies on the page and not know which was the US and which was Germany, France, and things like that. So, I don't think that that that insight was in any way responsible for the high inflation that we experienced.
So, I mean, I think it's always been a balance. Uh Uh you you've got to you've got to be strong on both of our dual mandates. And we we just For example, now we we don't feel that the labor market is at all a source of inflation. So, we don't need to be worrying about that. It's been a long time since we have had to worry about that.
Well, actually, during the during the pandemic recovery, the labor market was super overheated and tight. And that's when we had to worry about it. But but not now. And just on the other [clears throat] issue, um are you Would you need Do you need more insurance from the Justice Department before stepping down?
Is that what you're waiting for? Or what else? I'm waiting for you know, for the for the investigation to be well and truly over with finality and transparency. And I'm I'm waiting for that. And I will leave when I think it's appropriate to do so. Michael McKee. [clears throat] Michael McKee from Bloomberg Television and Radio.
I'd like to ask you if you could explain it a little more or characterize a little more the discussion about the two-sided view and interest rates because there were some members of the Open Market Committee who've been suggesting that we may need to raise interest rates even absent the war because inflation was not coming down fast enough.
Uh is there any sense that interest rates might have to go up? Or was this just a setup to sort of uh warn people that you're worried about the war impacts? So, nobody The three dissenters and and others who could have supported that and others who were, you know, who were voters and preferred non-voters who preferred it, they all supported the right decision.
Right? So, people are not saying we need to hike now. It's more a question of you know, don't we kind of feel that we should be neutral? And markets are markets What are markets doing? People argue that this is consistent with markets are doing. And again, it's a it's a very fair question. But, you know, these these changes There is, you know, it's a form of forward guidance.
And you want to make You don't want to make them You want to make them in a way that that will be sustained and continue to make sense and not something you need to take back uh you know, fairly quickly. So, I I think we just a group of us, including me, didn't feel like we needed to be in a hurry on that.
That that markets are not confused about our reaction function. We don't have a problem to solve on that. But, the other side of the argument is a good argument, too, as I as I mentioned. It's perfectly good argument to be having, good discussion to be having. So, and it came out the way it came out.
Well, you've got uh three dissents [clears throat] in favor of two-sided uh warning. You've got yourself staying on the board. You've got the criticism that does come from elected officials. Uh and you've got a lot of uh critics who have faulted the Fed for being too slow 2021 with inflation. Are you worried about Fed credibility under all of this?
Is that one reason that you want to stay on? Not not driving my my thinking now. I mean, monetary policy is going to get made by, you know, 19 people. There's a lot of stability there. Uh I mean, if you think about it, any every new fair Fed chair has the same situation, which is you've got 18 colleagues on the FOMC.
11 of them vote during any year. And you have to Your job is to create consensus. It's It's to talk to them, understand them, you know, be inside their thinking, and be able to pull them together and and get consensus and move. And that's that's what every Fed chair has to do. And I I think Kevin Warsh is actually quite well.
He has the capabilities, skills to be to be very good at that, I would think. So, I think I I'm not so worried about that process, you know. Uh I think that'll that'll work itself out. [clears throat] Howard. Uh thank you, Chair Powell. Howard Schneider with Reuters. You You mentioned that staying on as a governor, you intend to keep a low profile.
I'm just wondering if you could give us a little more detail on what that looks like and how you Touche. Um what that Yeah, walk down the steps. Uh what that looks like and particularly around the policy discussion, how you're able to uh to have your intervention and not be a shadow chair and not have a kind of an outsized influence over the process.
Yeah, you know, that's just something I would never do, you know, the shadow chair thing. No, it you know, I it's it's I don't know what the exact specifics of it will be. But, I'm going back to being a governor. I respect the role of chair. I you know, I was a chair. I was a a governor for 6 years, and I know what that's like.
I know what and I I had a you know, pretty front-row seat, with particularly with with Chair Yellen, to whom I I was close. When I when I I was worked with Chairman Bernanke for 2 years, but um you know, I I I was brand new at that time. So, I got a a sense of what it was. And I had real sympathy for how hard it is to get that group to consensus.
And I always felt like I, you know, I don't want to add to that unnecessarily. And that means try to support the chairs where the chair the direction the chair wants to go in if you can. If you can't, you can't. But, and I think that's that's the way it's always worked there cuz the chair only has one vote plus the ability to develop consensus.
And if people won't be, you know, they they won't if they're not flexible at all, then how do you ever do that? And so, that's why the chair has the authority the chair has really is to develop relationships with people and work with them and then and then put something forward that has consensus. And I you know, I I I propose to be a very constructive participant in that process.
Um really out of respect for for the office of the chair. And uh in your view as a a soon-to-be governor, how do you see the risks of oil prices bleeding into core inflation in coming weeks? Because that was it seems like the commentary that was coming from particularly some of the Reserve Bank presidents.
They were elevating concerns about the bleed into core. And you know, here we are with three dissents now. What do you see as the prospect of core inflation there Those prospects are real. Remember though, our our They're real. And the real thing is we're going to have to wait and see. We're going to need to see.
And the good news is we think our policy stance is just is in a very good place for us to wait and see. We, you know, we're right kind of at the high end of neutral or perhaps mildly restrictive. Um the labor market shows more and more signs of stability, whereas inflation is kind of misbehaving. And so, maybe a little bit of uh of restriction or the high end of neutral is just the right place to be.
So, we can wait here and see uh and see how things work out before we act. And we'll see how much that you know, how much does come through into core. You see it already in air airfares, of course. But, you may see it in many other places. Uh uh you know, we just don't know yet. And it's it's so unknowable because how how long will the strait be closed?
You can develop any number of scenarios that you want. But, we really won't know till we know. So, fortunately, we're in a good place to to to wait and wait and let things develop. Thank you. [clears throat] Uh thanks, Mr. Chairman. You started holding post post-meeting press conferences for every meeting as opposed to the ones with just with SECs.
Can you talk about why you see that as a net positive? So, we um we always said, when we were doing quarterly press conferences, we always said we can move at any meeting, but we only ever moved at the quarterly SEP meetings where we had the press conference. So, if you think about it, you know, we during the pandemic, we were moving like a lot at every meeting and sometimes between meetings.
And doing that without a press conference, I think would have been quite challenging. It's become the industry norm. It's the standard. I don't know whether that has to remain that way. I don't know. I mean, I it's it's just something people have become used to. And I do think it's quite helpful to, you know, to I mean, I I I try to deliver a message on behalf of the committee rather than 18 people 18 other people going out and delivering their message.
And it's, you know, it's going to be all over the place cuz we do, thankfully, have widely disparate views. Um okay, thanks. [clears throat] The other thing I wanted to ask about was the communications review from last year. Um Uh could you describe the debate last year? What changes were considered?
What you wanted? And what prevented action um any action on the on the on those changes? So, yeah, I'm not going to go into the the real small specifics. But, what we found very quickly was that um making making changes making really large changes, for example, to the dot plot or the SEP, um it didn't have We couldn't come up with anything that had really broad support on the committee.
And and so, we just moved on. We didn't we we didn't really do as much on on that as we might have. And you know, I was never the world's biggest fan of the dot plot. But, you you can't can't beat something with nothing. And you know, there's a We've looked at a bunch of things. And uh you know, it's something I Like I said, I think every new chair is going to look at our suite of communications.
And and think about what would be changes. We We are the only major central bank that doesn't publish a forecast. And that's because we have a 19-person committee. And you know, you try to do it You try to do that on the at the board that's hard at the at the committee that's hard. Uh it's hard if you do it at the staff.
So, it's you know, it's been It works. I think our communications are fine. But, looking at doing it in a different and better way is the most natural thing in the world. [clears throat] Thank you. I'm Colby Smith with The New York Times. If I could follow up on Mike's question about hikes, are we right to assume that the [clears throat] hawkish outcome for the Fed is still one in which the committee just extends the pause in rate cuts?
And to what extent is there a growing sense within the committee that monetary policy really isn't just restrictive at all right now? Um the economy is holding up relatively well despite this major energy shock, the unemployment rate has ticked lower, inflation was moving sideways even before the war and is now moving higher.
Um so so where is the committee at on that debate? You know, where we're at is we think our really we think our policy rate is in a good place. Um if we need to hike, we will we will certainly signal that and we will and we will certainly do it. And if we need to to cut, then if it's appropriate to cut, then we'll we'll signal the opposite.
I think we because we feel like we're we're in a good place to move in either direction. Um nobody's calling for a hike right now. Um so it really is going to depend on how things how things evolve. Uh and you know, that's really where it is. And I as I mentioned, you know, much closer question this cycle on changing the guidance, but but ultimately we didn't.
And as it relates to the war, at what point do you think the risks to growth will be larger than the risks to inflation as this conflict drags on? You know, you just have to find that out empirically. You know, with given our the fact that we're you know, a big exporter of energy and that our economy is far less energy intensive oil intensive than it was during the '70s.
Um you know, the the effects on the United States are really substantially less than those of Western Europe or or Asia. We're feeling much greater effects from from these things. The effects we're feeling in you know, in the current situation currently. And in in sort of what's priced in which is you know, a relatively quick outcome.
If if this goes on for much longer and prices go much higher, then we'll feel that much more. And [clears throat] of course I'm talking about aggregate inflation numbers. We know we're very well aware that people are experiencing higher gas prices all over the country now. And [clears throat] that hurts.
That's and these are those those hikes may continue to happen. Uh and other other things are going to start to reflect air airline fares I've mentioned and and other other products and services that are dependent upon petroleum and derivatives of of petroleum. People are going to start to feel that.
Edward. Thank you [clears throat] thank you, Chair Powell. Edward Lawrence with uh Fox Business. So I guess I'll just ask you directly on this. The markets don't see a rate cut at all this year is what they're predicting. Do you think that we are at the neutral rate? Why or why not? You know, the the neutral rate is a we cannot know it with uh with certainty.
I think pretty close to the neutral rate, yeah. I I always had it, you know, between 3 and 4%. We're a little north of 3 and 1/2. So that's well in the range of what I would consider a reasonable reasonable, but at the higher end of the range of what I would consider reasonable neutral rate. Um you know, I think you're the the labor market is still probably cooling off just a little bit.
Um and I I I don't think there's a much of a case for any case really for the for uh policy looking, you know, meaningfully restrictive, maybe mildly restrictive or neutral, I would say. Um and I want to follow up on some of the other questions [clears throat] about uh your future a little bit. The The first time we've seen the four dissents now since October of 1992.
Are you handing off a divided Fed? You know, the thing [clears throat] to remember is uh uh we have always had vigorous debates and and uh they're excellent debates. I have to say they're they've been really good. Uh and we're we're in an unusually difficult situation. So we've we've really had four supply shocks.
You can actually can you can say more than four, but at a minimum we've we had the pandemic. We had the invasion of the of Ukraine. We had tariffs. And now we have uh Iran and the oil. Um you know, the oil spike. So those every every supply shock has the capability of right driving inflation up and unemployment up.
And and what do you do? You know, you're it's it's central bank has a really hard time knowing what to do. So the right thing to do is to try to balance the achievement of those two goals and that's what our framework calls for us to do. But these are really tough difficult judgments. You've got to have a forecast for each variable.
You've got to think how long it's going to take to get back to target. You got to think how how restrictive or not is policy. So it's only natural that you have a range of views on the committee. You know, people are going to see it different ways. They're going to have different risk tolerances and that kind of thing.
I mean, if everybody agreed, that would be that would be surprising. Uh and I I I think it's only it's partly a function of the extraordinarily challenging set of supply shocks that we've been dealing with now for 5 6 years. Selina Wang. [clears throat] Thank you so much, Chair Powell. Selina Wang with ABC News.
Are you confident that Kevin Warsh will stand up to political pressure from President Trump? So he he testified very strongly to that effect in his hearing and I and I'll take him at his word. And when it comes to gas, right now it's over $4 a gallon. Inflation just hit a 2-year high. Should Americans expect to be paying higher gas prices for the rest of this year?
And in your view, does that take a rate cut off of the table? And secondly, by staying on as uh Fed governor, what message do you think you're sending to the president? I I don't know what gas prices are going to do for the rest of the year. And uh it will depend on how long the strait remains closed and how quick quickly it can be reopened and that kind of thing.
But remember, when gas prices go up, um that's disposable income coming out of people's pockets. So they're going to spend less on other things. So there will be a hit to GDP. So it's a you know, it's a it's a question whether spending you know, goes down uh to offset the inflationary effects. So it's not the answer isn't obvious uh ex ante whether you whether you should move your rate over because of that.
We'll have to see how it evolves. And the message it sends to President Trump by staying on? I'll stand on what I said earlier. [clears throat] Uh Victoria. Hi, Victoria Guida with Politico. Um during your tenure, Fed independence has come under pressure in a a lot of different ways. And I was just wondering, practically speaking, where do you see Fed independence as coming from?
Is it the law? Is it political support from Congress? Is it the actions of the Fed? What What sustains Fed Fed independence? Well, it's you know, it's it's to to a significant extent, it is the law. And you know, we've had to go to court to successfully so far to defend it. But you know, the law does create a setting in which the Fed can and is directed to uh make monetary policy without consideration of political factors.
And so uh so part of it is the law. But it it goes beyond that though. There's a set of customs. There's there's a boundary line between the Fed and the administration between the Fed and the Treasury Department. And we need to respect those continue to respect those boundaries about what the Fed is responsible for and what the Treasury is responsible for and what the the rest of the administration is responsible.
So some some of it is legal. Um in fact, it's all legal at the end of the day, but there it's it's more than just monetary policy. We you know, we don't we don't want to use our tools to we haven't wanted to use our tools to achieve goals that are really clearly outside our mandate. Every administration looks at our tools and thinks it would be good to repurpose those to serve other purposes, but that gets it dragged that's dragging us into politics and in into fiscal policy.
So we've resisted that. Well, maybe another way of asking it too is do you think that Fed independence is as strong now as when you became chair? And if so, why? Look, I think it's at risk. I mean, I think these these you know, these legal assaults if you will, as I mentioned, you know, we're the institution is being battered over these things.
We're having to resort to you know, the courts to to enforce our legal, you know, not not even it's not so much independence. It's it's really the ability to do monetary to make monetary policy without political considerations. That's what we're talking about. And uh we've had to do that and we've been successful so far, but that's not over.
None of that is concluded yet. And it's you know, it's really important. It's not about It's not about people who work at the Fed or the institution. It's about the benefits of a central bank that makes decisions based on analysis and our best thinking uh it rather than you know, trying to help or hurt politicians.
It's you know, that there's there's a bright line between central banks who do one and do the other. And successful countries have uniformly successful advanced economy countries have a really strong set of protections around their central bank just for that reason. So that's what it's all about. I you know, I I think I am confident as I said in my remarks that the Fed will continue to make its decision based on analysis rigorous analysis and not on political considerations, but we've had to fight for it.
And I you know, I'd like to think that you know, I'd like to think we can get out of that era and and back to respecting you know, what the law says and what custom has been, which is to you know, let the Fed do our thing. We're you know, we're we're not we're it's a it's an institution full of human beings who work super hard to get things right for the benefit of the public.
We're all human. Don't expect for perfection, but do expect us to make you know, decisions without political considerations and and the very best analysis we can bring. Katarina. [clears throat] Katarina Saraiva, Bloomberg News. Um how would you characterize um what you've heard from your colleagues on your decision to stay?
Um do you have their support? And then have you heard concern from your colleagues um about continued legal attacks from um the executive branch? Is this something that others have uh you know, talked to you about? So, that I think that um I I don't want to report on what my colleagues think. They can they can speak for themselves, but you know, there yeah, there are there are widespread concerns that these things may continue.
That's all that's all I'll say and uh you know, and that would be a problem. And um so. [clears throat] Um and then I just also wanted to ask about um Governor Waller's speech on the Reserve Banks. Um what you know, do you have any thoughts on on centralizing some of those functions in the way he described?
And then um have you know, do you are you concerned that something like that could potentially be a slippery slope to um you know, to consolidate Reserve Bank functions even more in such a way where you you know, the Central Bank ultimately loses some of that important regional information? So, we try to be good stewards of the public's money and efficient and Chris in particular, Chris Waller is particularly passionate about that.
Of course, so are the Reserve so are the presidents and you know, it's a question of how do you accomplish it? Uh we we of course and and Chris said this in his speech. We you know, we want 12 strong independent Central Banks with their own staffs and their own monetary policy views and all that. But you know, there are things that are done in all 12 which could well be done at one much more efficiently and with cost savings and so there's a back and forth going on on that.
But everybody everybody's on the same page. The other thing he touched on was was uh the idea of removing Reserve Bank presidents from office over different different views on monetary policy and I would I would just agree with him so strongly that that would be the beginning of the end of of the Fed's ability to to make monetary policy independently.
If every administration could come in and do that you're you're just another cabinet agency at that point. So, that's not something that I would support. Chris said the same thing. Christine. [clears throat] Thanks, Chair Powell. Christine Romans, NBC News. I want to ask about legacy. When the history books are written, how do you think your stewardship at the Fed will be remembered for the past 8 years?
You know, I'm going to just say that uh that's for that's for someone else to say. I'll give you a mulligan on that. [clears throat] All right. I'm going to ask you about uh misbehaving inflation then. You talked about those four big shocks, supply shocks over the past 5 years and in inflation's still misbehaving.
What's your message to American families who feel like inflation has not been under control for them really since since the COVID reopening? You know, we're we're committed to bring inflation back down to 2% and and sustainably. That's that's our goal and we will we'll stick at it until that happens.
We keep getting these events keep happening which keep driving up costs and you know, the best thing we can do is to use our tools to guide inflation back down to 2%. I think trying to get there really quickly could be very costly in terms of of uh of job loss and things like that, but we try to get there over time in a way that does the least damage possible and you know, our commitment to that is never-ending and unshakable.
How would you describe the economy outside of the misbehaving inflation? I mean, um it's still awfully resilient given all of the blows. I don't know that you can be awfully resilient. So, it's actually quite resilient, I would say cuz it's a positive thing if I can if I can have that amendment. Yeah, that that you know, growth is really solid across our economy.
Some of that is um that consumer spending is hanging in pretty well. The the most recent data are good. And some of it is just the apparently insatiable demand for data centers all over the United States. So, a lot of uh business investment going into building data centers and every reason to think that that continues.
So, you've got an economy that's growing at 2% or better. PDFP, which is private domestic final purchases that which is really a a better signal of of uh of a momentum in the economy is actually higher than that. So, that's you know, that's a positive thing. The then if you look at the unemployment rate, 4.3%.
So, that's a low rate. That's pretty close to mainstream estimates of the natural rate. We've been there for a long time. So, it's it's it doesn't feel like a good labor market to some who do don't have jobs because quits are really low, hires are really low and there's effectively no new net job uh creation.
So, that's a that's you know, in a sense the labor market is in balance, but it's an un unusual and uncomfortable kind of a balance where people who don't have jobs will have a hard time breaking in unless somebody quits their job. So, um so that's pretty good you know, inflation is the thing we need to work on and it's partly tariffs, which we think we think that that inflation should subside over the course of this year because it's it's kind of a one-time increase.
It shouldn't be repeated. And that should start happening pretty soon. The energy in inflation that we're getting should go through fairly quickly. Uh and we'll we'll just have to see how that works out. In the meantime, you know, we think our policy stance is in a good place for us to hold and and wait developments.
Jennifer. [clears throat] Thank you, Chair Powell. Jennifer Schonberger with Yahoo Finance. At the risk of beating the dead horse here, clearly three members objected to keeping that easing bias in the statement and [clears throat] you said that the majority still didn't need uh still didn't need to uh move to new language at this point.
So, does the majority of the committee still have a bias towards cuts at this point or has the bias on the committee shifted away from cuts towards holding or hikes if that was needed? I so, I think that you know, the the center is moving toward a more neutral place. And that's sort of what markets are saying, too.
I just think you know, uh there's a lot of signaling going on when you change guidance like that. And so, we we just I guess the majority of a majority of us didn't feel like we needed to send a signal on that right now. Uh and but maybe it'll come to that. And and the reason is because you know, we're kind of waiting to see what happens with with events in the Middle East and what are the implications of those events for the US economy.
So, there was just a there's a group who feels like we don't need to be in a hurry to do that. We we get it and of course, we will move to a hiking bias if we want to hike and we'll move to a new a neutral bias before that. There was a difference over whether to do it at this meeting at at a meeting at which all but one of us agreed that that the that the rate decision was correct, which was not to move.
And you just said moments ago [clears throat] that you believe Fed independence is at risk. Is it safe to say that you want to stay on as a governor to serve as a check and balance on that? I I want to stay until I I will stay until it's a I feel it's appropriate for me to leave. And and yes, that is that is really what is driving this.
Uh I'm not uh I'm not looking to be you know, a high-profile uh dissident or anything like that. I I'm I'm more looking at the other aspects of this and wanting to see that things have calmed down and and re- returning to a traditional model of working with the people that you have and bringing into consensus and respecting that consensus.
That's what that's what I'm I'm hoping to see. Matt Egan. [clears throat] Thanks, Chair Powell. Matt Egan, CNN. Uh you've made many tough decisions in your time at the Fed. And as your time as chair comes to a close and you think about your tenure and perhaps your legacy, are there any decisions that stand out as ones that you're particularly proud of?
And are there any that with the benefit of hindsight you would take a mulligan on? Yeah, I as I it's hard to I wouldn't want to signal single out individual things at this point. You know, I'll just say uh you know, we all of us together have consistently tried to do what we think is best for the American people based on our tools and our objectives that that Congress has given us.
It's been very challenging because we've been in a situation of supply shock supply shocks really for 6 years. And it that's just a very different situation than for very long time what the Fed and other Central Banks were doing all the time was demand management. And you know, and there was always the inflation mandate, but inflation was low for 25 years.
So, this is a very different world and a much more challenging one where you have to balance the two objectives. And by the way, Central Banks that have a an inflation mandate have to do exactly the same thing because they're balancing economic activity. So, that's been challenging and we've you know, we've tried to do our very best through these really challenging uh times and I'm really proud of of uh the work that I've done that my that my colleagues and I have done during these uh these years.
Now, to follow up on some of the the discussion around Fed [clears throat] independence, can you explain to the public why this notion of Fed independence, which might sound kind of wonky to some, is so critical? I mean, what are the consequences if either the Supreme Court rules against Lisa Cook or the Fed in the future decides to make decisions more around the political calendar instead of the economic data.
So, every major uh advanced economy in the world has made the same decision the United States has made. And that is that they want to take the making of monetary policy, the setting of interest rates to support the economy to achieve maximum employment and price stability, they want to take that out of the direct control of elected politicians.
And the reason is elected politicians are always running for election and they'll always want low rates and that will re- lead to inflation over time. So, after, you know, literally centuries of experience with that, the whole world moved to the different model and it's it's worked great. I mean, this is this is the era in which inflation was under control for 40 years.
Then we had the pandemic inflation everywhere on the in the world and now we have inflation that had gone pretty much all the way back to target, really close to all the way back to target and now is being buffeted by the energy shock and the US buffeted by the by the tariff shock as well. So, but what I would say to the general public is that's that's the back story is that um it don't think of about it an institution being independent.
Think about it this way that you want people to make monetary policy and set interest rates to benefit the general public and to try to achieve economic goals, which are maximum employment and price stability and focus only on that and ignore political considerations completely. Ignore them. It's this isn't bipartisan.
Good afternoon. Uh my colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefits benefit of the American people. The US economy has been expanding at a solid pace. While job gains have remained low, the unemployment rate has been little changed in recent months.
Inflation has moved up and is elevated in part reflecting the recent increase in global energy prices. Today, the FOMC decided to leave our policy rate unchanged. We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2% inflation goals. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook and we will remain attentive to risks to both sides of our dual mandate.
I'll have more to say about monetary policy after briefly reviewing economic developments. Recent indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient and business fixed investment has continued to expand at a brisk pace. In contrast, activity in the housing sector has remained weak.
In the labor market, the unemployment rate was 4.3% in March and has changed little in recent months. Job gains have remained low. A good part of the slowing in the pace of the job growth over the past year reflects a decline in the growth of the labor force due to lower immigration and labor force participation though labor demand has clearly softened as well.
Other indicators, including job openings, layoffs, hiring, and nominal wage growth, generally show little change in recent months. Inflation has moved up recently and is elevated relative to our 2% longer-run goal. Estimates based on the consumer price index and other data indicate that total PCE prices rose 3.5% over the 12 months ending in March boosted by the significant rise in global oil prices that has resulted from the conflict in the Middle East.
Excluding the volatile food and energy categories, core PCE prices rose 3.2% over the 12 months ending in March. This relatively high rate largely reflects the effects of tariffs on prices in the goods sector. Near-term measures of inflation expectations have risen this year likely because of the substantial rise in oil prices.
Most measures of longer-term expectations remain consistent with our 2% inflation goal. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today's meeting, the committee decided to maintain the target range for the federal funds rate at 3 and 1/2 to 3 and 3/4%.
The economic outlook remains highly uncertain and the conflict in the Middle East has added to this uncertainty. In the near term, higher energy prices will push up overall inflation. Beyond that, the scope and duration of potential effects on the economy remain unclear as does the future course of the conflict itself.
We will continue to monitor the risks to both sides of our dual mandate. We are well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data the evolving outlook and the balance of risks. Monetary policy is not on a preset course and we will make our decisions on a meeting-by-meeting basis.
[clears throat] This is my last press conference as chair and I will close with a few thoughts. First, I want to congratulate Kevin Warsh on his advancement out of the Senate Banking Committee this morning. This is an important step forward and I wish him well as that process continues. The Federal Reserve exists for one fundamental purpose, to foster the economic conditions in which American families and businesses can thrive.
Stable prices, a strong job market, and a financial system they can depend on. Every decision we make, whether about interest rates or regulatory and supervisory matters or other issues, is made in service of that purpose. Our decisions reflect the collective judgment of the Board of Governors and the Federal Open Market Committee, colleagues who demonstrate analytical rigor, principled judgment, and a genuine commitment to the public interest.
Our collaborative and deliberative process has long reflected a shared commitment to finding common ground in service to our mission. This institution is resilient, capable, and staffed by professionals of extraordinary talent and exceptional dedication. It has been a privilege to serve alongside so many great public servants at the Board of Governors and around the Federal Reserve System.
The Fed's work is only as effective as the public's understanding of it and you, the press, are essential to keeping the public informed about we about what we do and why. The people we serve benefit from your careful reporting. I welcomed the [clears throat] announcement last Friday by the US Attorney for the District of Columbia that she had closed the criminal investigation.
She also noted, however, that she would not hesitate to restart the investigation. Over the weekend, the Department of Justice provided assurances that they will not reopen the investigation unless there's a criminal referral from the Fed's Inspector General. And absent such a referral if they do appeal the recent court decision, they would not seek, as part of that appeal, to restart the investigation or send new subpoenas.
I've [clears throat] said that I will not leave the board until this investigation is well and truly over with transparency and finality and I stand by that. I'm encouraged by recent developments and I'm watching the remaining steps in this process carefully. My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve.
After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined. I plan to keep a low profile as a governor. There is only ever one [clears throat] chair of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.
Once sworn in as Board Chair, his new colleagues will elect him to chair the FOMC as well. As I regularly point out from this podium, our success in delivering our goals matters for all Americans. I'm confident that that the Fed will continue to do its work with objectivity, integrity, and a deep commitment to serve the American people.
Thank you and I look forward to your questions. [clears throat] Thank you, Mr. Chair. Appreciate the kind words about the press, often doesn't come from the podium in different places, but appreciate that. Um can you talk about what has gone into your decision to remain on the board? What kind of criteria are you weighing and uh how long might you stay?
Thank you. Sure. So, [clears throat] you know, my my concern is really about the series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors. And I I want to note here, this has nothing whatever to do with verbal criticism by elected officials.
Uh I I've never suggested that such ver- verbal criticism is a problem and neither has anyone else here. But these legal actions by the administration are unprecedented in our 113-year history and there are ongoing threats uh of additional such actions. I I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public which is the ability to conduct monetary policy without taking into consideration political factors.
It is so important for our economy, for the people that we serve, that they can depend over time on a central bank that operates that way free of political influence. It's part of the absolute foundation of this amazing economy that we have. It's just one of the many reasons why the US economy is the envy of the world.
That piece of institutional architecture separates successful countries from unsuccessful countries. It is extremely important, not for the people who work at the Fed any given time, but for the people that we serve that the Fed remain able to conduct monetary policy in a way that doesn't get pulled into politics trying to help or hurt any particular politician or political party.
It's critical for the people that we serve. In terms of when I would leave, I I will leave when I when I think it's appropriate to do so. Was that all your questions or was there Well, I just have a follow-up which is [clears throat] what would you say to the criticism that by remaining on the board you're actually taking a political act and denying President Trump the majority of the board which as president he would have if you left.
I don't see that at all. As I mentioned uh you know, I'm literally staying because of the actions that have been taken. I had long planned to be retiring and you know, the things that have happened in the really in the last 3 months of I think left me no choice but to stay until till I see them through at least that long.
Um you know, in addition I don't see how this will interfere. I'm my intention is not to interfere. You know, I was a governor for almost 6 years. And the tradition is at the Fed that governors who understand how difficult the role of chair is and as a as a soon-to-be former chair I do understand how hard it is to get consensus with 19 strong-minded people.
You work with the chair. You you try to you try to uh be heard, but also collaborate with the chair and try to support the chair when you can. When you can't, you can't. And I think that's the attitude that people generally take and that's the attitude that I'll take. Uh Nick. Uh Chair Powell, if I could ask about the inflation outlook.
In March you described the standard practice of looking through energy shocks as conditional on inflation expectations staying anchored. Since that meeting there has been very little progress reopening key energy trade corridors. Can you help us understand how the inflation outlook has changed in the intermeeting period beginning with the prospects for tariff pass-through resolving on the timeline that you had outlined in March before getting to the energy shock that is now on top.
So, you know I would look at it this way. Um for a long time we've been working on on the hypothesis really that tariff tariffs would would lead to a one-time price increase and that that would go away over time. In other words, that there would be no further change so measured inflation wouldn't reflect that higher level going up more and more.
And it's time for that to happen. You know, we really do expect that to be happening in the next two quarters. So, we'll be watching very carefully to see that what we've thought all along would happen. That's the kind of critical part of the forecast. We we need to really see that. With with energy it's it's so hard to say.
I mentioned, you know, in you know, sort of the textbook you you would look through it an oil shock because they tend to be short-lived and they tend to revert. And monetary policy works with long and variable lags. So, you wouldn't necessarily react right away. I think that is all the more true given that we're several years above 2% inflation and that we're already looking through the tariff shock.
So, I think we're going to be very cautious about that. It's but the question about about looking through energy really is not not in front of us right now. We it hasn't even peaked yet. And I think we'd want to see the backside of that and progress on tariffs before we even thought about uh about reducing rates.
So, if I could follow up, the the statement today preserves language that has taken on some meaning uh as it was socialized when the committee was actively lowering rates. Why is that easing bias still uh ripe given how different the inflation outlook is now versus a meeting or two ago. And what more [clears throat] would have to happen for it to get evicted?
So, um that was uh as you will recall we we had a discussion about that at the last meeting and we talked about it in in the press conference after the March meeting. We had the same today. We had quite a vigorous discussion about that that very issue and the guidance and is it still appropriate and that kind of thing.
And I would say that the you know, number of people on the committee who either could support that language change changing to a more neutral stance so that a hike is as likely as as a cut. That number has increased over the intermeeting period and it's easy to see why. I mean, it's it's it's it's a good question, right?
You see inflation has moved up over the interim a bit. Core inflation's 3.2 now moving albeit just a little bit in the wrong direction. And we we know that there will be you know, that there's uh headline inflation coming out of the Gulf and we don't know how much that will be. We just we're going to need to see.
So, it makes all the sense in the world that people would look at that and and we'd have a vigorous discussion about that. You saw the three people descended over the language. I think all of those people agreed with the with the rate decision. Um so, the majority of the committee did not want to do that and and and I was I didn't think we needed to do it this meeting.
It really was just a question of what's why do we need to do that now? You know, we have so much to learn. There's so much uncertainty about the path ahead. There doesn't need to be any rush to make that decision now because you know, what what happens in the next 30-60 days even by the next meeting could really change the picture around that around that language.
So, you know, it was a it was a it's a close it's it's a much closer thing on the committee that it was in March and that makes all the sense in the world it seems to me. Claire. So, Claire Jones, Financial Times. Um just just going back to this issue of the the easing bias. Um we've now got oil approaching $120 a barrel when it comes to the benchmark.
Um Brent crude. Um if it stays around those levels 6 weeks from now, what would be your guess best guess as to whether the easing bias will still be in the statement. Thank you. I I wouldn't want to guess. You know, we'll first of all, we're going to have new leadership in all likelihood by then and and new leadership's going to have a very important role to play in that.
So, uh I won't be standing here at this podium to answer your question. So, um I don't know. As I mentioned, that's all I can really say is that we had we had a great discussion about that today. It's a you know, it's got it's gotten to be a better question in the interim period. We had the discussion.
A majority are still on the page of of not feeling the need to move to that level and I I that's where I am. Uh I I get it though. You know, at a certain point you would move and that that conceivably could come as soon as the next meeting. Thank you. Just to follow up, um [clears throat] the new leadership also seem rather lukewarm on press conferences and on the dot plots.
What would your advice to him be on these communication tools? So, I'm I'm not going to give him any advice through you today here, but I've you know, I think communications generally is I think every incoming chair takes a look at communications and it's a very healthy thing. I mean, communications is it's very complex and uh you know, you can always be be looking at new things.
And and I if that happens, feels like it's going to happen, that's completely appropriate thing. Neil. Hi Chair Chair Powell, Neil [cough] Irwin with Axios. [clears throat] Um can you tell us if you've been in touch with with incoming Chairman Warsh? Any To what extent is this a normal transition process versus all the things swirling around something unusual and and what can we expect when when he takes takes that podium in a few weeks?
I I haven't seen him since seeing him at a dinner in January where I congratulated him and had a nice nice chat with him. Haven't seen him. I don't know what a normal process is. You know, the last process was with Janet Yellen with whom I had worked for 6 years and so it was uh you know, we were sitting down the hall from each other.
So, it was a very different thing. I think I think this is and will be a very normal standard kind of a kind of a transition process. So, that's that's what I expect. I have every reason to think it will be. Quick follow-up, is this Supreme Court ruling on Governor Cook a factor in when you may leave as a governor?
I wasn't thinking of it as such, but no, not really. I mean, I'm thinking more of the other things I mentioned. [clears throat] Chris. Hi. Thanks for taking our question. I wanted to ask a question about your tenure. I'm Chris Rugaber at Associated Press. Um during your tenure as chair you often spoke about how disadvantaged Americans benefited from extended periods of low unemployment.
And the new framework the Fed adopted in 2020 some economists say elevated the Fed's employment mandate. Are you worried that the the pandemic inflation spike that followed will make future Fed chairs more reluctant to pursue a hot jobs market and should they be? Um I don't know the answer to that. I mean, what we So, what we experienced um in in in the teens, the mid-teens was really low levels of unemployment for a long period of time and no reaction from inflation.
And we all took very much took notice of that. We also noticed that the biggest wage gains were going to people at the bottom end of the income spectrum. And we had many many reports of I mean, it felt like a fairly stable equilibrium and a lot of benefits were flowing to people at the bottom end of the uh income spectrum including companies were you know setting up in in people who were confined and like training them before they got out and it was it was a very healthy sort of set of societal dynamics.
So of course I think anybody would love to get back to that. I don't think that anything that happened to create the the global pandemic inflation was in any any way related to over waiting the employment market. I mean it was a it was a global shock that happened essentially very very similarly all over the world that had to do with closing reopening stimulus and all that and I mean you could you could look at a a graph of 10 big economies on the page and not know which was the US and which was Germany France and things like that.
So I don't think that that that insight was in any way responsible for the high inflation that we experienced. So I mean I think it's always been a balance uh uh you you've got to you've got to be strong on both of our dual mandates and we we just for example now we we don't feel that the labor market is at all a source of inflation.
So we don't need to be worrying about that. It's been a long time since we have had to worry about that. Well actually during the during the pandemic recovery the labor market was super overheated and tight and that's when we had to worry about it but but not now. And just on the [clears throat] other issue are you would you need you need more insurance from the Justice Department before stepping down is that what you're waiting for or what else I'm waiting you know for the for the investigation to be well and truly over with finality and transparency.
And I'm waiting for that. And I will leave when I think it's appropriate to do so. Michael McKee [clears throat] Michael McKee from Bloomberg Television and Radio. I'd like to ask you if you could explain a little more or characterize a little more the discussion about the two-sided view and interest rates because there were some members of the Open Market Committee who've been suggesting that we may need to raise interest rates even absent the war because inflation was not coming down fast enough.
Uh is there any sense that interest rates might have to go up or was this just a set up to sort of warn people that you're worried about the war impacts? So nobody the three dissenters and and others who could have supported that and others who were you know who were voters and preferred non-voters who preferred it they all supported the rate decision.
Right? So people are not saying we need to hike now. It's more a question of you know don't we kind of feel that we should be neutral and markets are our markets what are markets doing? People argue that this is consistent with markets are doing. And again it's a it's a very fair question but you know these these changes there is you know it's a form of forward guidance and you want to make you don't want to make them you want to make them in a way that that will be sustained and continue to make sense and not something you need to take back uh you know fairly quickly.
So I think we just a group of us including me didn't feel like we needed to be in a hurry on that that that markets are not confused about our reaction function. We don't have a problem to solve on that. But the other side of the argument is a good argument too as a as I mentioned it's a perfectly good argument to be having good discussion to be having.
So and it came out the way it came out. Well you've got three dissents [clears throat] in favor of two-sided warning. You've got yourself staying on the board. You've got the criticism that does come from elected officials and you've got a lot of critics who have faulted the Fed for being too slow 2021 with inflation.
Are you worried about Fed credibility under all of this? Is that one reason that you want to stay on? Not not driving my my thinking now. I mean monetary policy is going to get made by you know 19 people. There's a lot of stability there. Uh I mean if you think about it any every new Fed Fed chair has the same situation which is you've got 18 colleagues on the FOMC 11 of them vote during any year and you have to your job is to create consensus.
It's it's to talk to them understand them you know be inside their thinking and be able to pull them together and and get consensus and move and that's that's what every Fed chair has to do and I I think Kevin Warsh is actually quite well he has the capabilities skills to be to be very good at that I would think.
So I think I'm not so worried about that process you know I think that'll that'll work itself out. [clears throat] Howard Uh thank you Chair Powell. Howard Schneider with Reuters. You mentioned that staying on as a governor you intend to keep a low profile. I'm just wondering if you could give us a little more detail on what that looks like and how you can touché.
Um what that walk down the steps. What that looks like and particularly around the policy discussion how you're able to to have your intervention and not be a shadow chair and not have a kind of an outsized influence over the process. Yeah you know that's just something I would never do you know the shadow chair thing.
No you know I it's it's I don't know what the exact specifics of it will be but I'm going back to being a governor. I respect the role of chair. I you know I was a chair I was a governor for 6 years and I know what that's like. I know and I I had a you know pretty front row seat with particularly with with Chair Yellen to whom I I was close when I when I I was worked with Chairman Bernanke for 2 years but um you know I I I was brand new at that time.
So I got a a sense of what it was and I had real sympathy for how hard it is to get that group to consensus and I always felt like I you know I don't want to add to that unnecessarily and that means try to support the chairs where the chair the direction the chair wants to go in if you can. If you can't you can't but and I think that's that's the way it's always worked there cuz the chair only has one vote plus the ability to develop consensus and if people won't be you know they they won't if they're not flexible at all then how do you ever do that?
And so that's why the chair has the authority the chair has really is to develop relationships with people and work with them and then and then put something forward that has consensus. And I you know I I I propose to be a very constructive participant in that process uh really out of respect for for the office of the chair.
And in your view as a soon-to-be governor how do you see the risks of oil prices bleeding into core inflation in coming weeks because that was it seems like the commentary that was coming from particularly some of the Reserve Bank presidents they were elevated concerns about the bleed into core and you know here we are with three dissents now.
What do you see as the prospect of core inflation now? those those prospects are real. Remember though our they're real and the real thing is we're going to have to wait and see. We're going to need to see and the good news is we think our policy stance is just is in a very good place for us to wait and see.
We you know we're right kind of at the high end of neutral or perhaps mildly restrictive. Um the labor market shows more and more signs of stability whereas inflation is kind of misbehaving and so maybe a little bit of of restriction or the high end of neutral is just the right place to be. So we can wait here and see and see how things work out before we act.
And we'll see how much that you know how much does come through into core. You see it already in air fares of course but you may see it in many other places uh you know we just don't know yet and it's it's so unknown because how how long will the straight be closed? You can develop any number of scenarios that you want but we really won't know until we know.
So fortunately we're in a good place to to to wait and wait and let things develop. [clears throat] Thanks Mr. Chairman. You started holding post post-meeting press conferences for every meeting as opposed to the ones with just with SEPs. Can you talk about why you see that as a net positive? So we um we always said when we were doing quarterly press conferences we always said we can move at any meeting but we only ever moved at the quarterly SEP meetings where we had the press conference.
So if you think about it you know we during the pandemic we were moving like a lot at every meeting and sometimes between meetings and doing that with our press conference I think would have been quite challenging. It's become the industry norm it's the standard. I don't know whether that has to remain that way.
I don't know. I mean I it's it's just something people have become used to and I I do think it's quite helpful to you know to uh I mean I I I try to deliver a message on behalf of the committee rather than 18 people 18 other people going out and delivering their message and it's you know it's going to be all over the place cuz we do thankfully have widely disparate views.
Um thanks. [clears throat] The other thing I wanted to ask about was the communications review from last year. Um could you describe the debate last year? What changes were considered? What you wanted and what prevented action any action on the on the on those changes? So yeah I'm not going to go into the the real small specifics but what we found very quickly was that um making making changes making really large changes for example to the dot plot or the SEP um it didn't have we couldn't come up with anything that had really broad support on the committee and and so we just moved on.
We didn't we we didn't really do as much on on that as we might have. And you know I was never the world's biggest fan of the dot plot but you you can't can't beat something with nothing and you know there's a that we've looked at a bunch of things and uh you know, it's something I like I said, I think every new chair is going to look at our suite of communications.
And and think about what would be changes. We we are the only major central bank that doesn't publish a forecast. And that's because we have a 19-person committee and you know, you try to do it you try to do that on the at the board that's hard at the at the committee that's hard. Uh it's hard if you do it at the staff.
So, it's you know, it's been it works. I think our communications are fine, but looking at doing it in a different better way is the most natural thing in the world. [clears throat] Thank you. I'm Colby Smith with The New York Times. If I could follow up on Mike's question about hikes, are we right to assume that the hawkish [clears throat] outcome for the Fed is still one in which the committee just extends the pause in rate cuts?
And to what extent is there a growing sense within the committee that monetary policy really isn't just restrictive at all right now? Um the economy is holding up relatively well despite this major energy shock. The unemployment rate has ticked lower. Inflation was moving sideways even before the war and is now moving higher.
Um so so where is the committee at on that debate? You know, where we're at is we think our policy really we think our policy rate is in a good place. Um if we need to hike, we will we will certainly signal that and we will and we will certainly do it. And if we need to to cut then if it's appropriate to cut then we'll we'll signal the opposite.
I think we because we feel like we're we're in a good place to move in either direction. Um nobody's calling for a a hike right now. Um so it really is going to depend on how things how things evolve. Uh and you know, that that's really where it is. You know, as I mentioned close you know, much closer question this cycle on changing the guidance, but but ultimately we didn't.
And as it relates to the war, at what point [clears throat] do you think the risk to growth will be larger than the risk to inflation as this conflict drags on? You know, you you just have to find that out empirically. You know, with given our the fact that we're you know, a big exporter of energy and that our economy is far less energy intensive oil intensive than it was during the '70s.
Um you know, the the effects on the United States are really substantially less than those of Western Europe or or Asia. We're feeling much greater effects from from these things. Our effects we're feeling in you know, in the current situation currently. And in in sort of what's priced in which is you know, a relatively quick outcome.
If if this goes on for much longer and prices go much higher then we'll feel that much more. And of course [clears throat] I'm talking about aggregate inflation numbers. We know we're very well aware that people are experiencing higher gas prices all over the country now. And that hurts. [clears throat] That's and these are those those hikes may continue to happen.
Uh and other other things are going to start to reflect airline fares I mentioned and and other other products and services that are dependent upon petroleum and derivatives of petroleum. People are going to start to feel that. Edward. [clears throat] Thank you thank you, Chair Powell. Edward Lawrence with uh Fox Business.
So, I guess I'll just ask you directly on this. The markets don't see a rate cut at all this year is what they're predicting. Do you think that we are at the neutral rate and why or why not? You know, the the neutral rate is a we cannot know it with uh with certainty. I think pretty close to the neutral rate.
Yeah, I I always had it you know, between 3 and 4%. We're a little north of 3 and 1/2. So, that's well in the range of what I would consider a reasonable reasonable, but at the higher end of the range of what I would consider reasonable neutral rate. Um you know, I think you're the the labor market is still probably cooling off just a little bit.
Um and I I I don't think there's a much of a case for any case really for the for uh policy looking you know, meaningfully restrictive maybe mildly restrictive or neutral, I would say. Um and I want to follow up on some of the other questions about [clears throat] uh your future a little bit. The the first time we've seen the four dissents now since October of 1992.
Are you handing off a divided Fed? You know, [clears throat] the thing to remember is uh uh we have always had vigorous debates and and uh they're excellent debates. I have to say they're they've been really good. Uh and we're we're in an unusually difficult situation. So, we we've really had four supply shocks.
You can actually can you can say more than four, but at a minimum we've we had the pandemic. We had the invasion of the of Ukraine. We had tariffs and now we have Iran and the oil um you know, the oil spike. So, those every every supply shock has the capability of right driving inflation up and unemployment up.
And and what do you do? You know, you're it's a central bank has a really hard time knowing what to do. So, the right thing to do is to try to balance the achievement of those two goals and that's what our framework calls for us to do. But these are really tough difficult judgments. You've got to have a forecast for each variable.
You've got to think how long it's going to take to get back to target. You got to think how how restrictive or not is policy. So, it's only natural that you have a range of views on the committee. You know, people are going to see it different ways. They're going to have different risk tolerances and that kind of thing.
I mean, if everybody agreed that would be that would be surprising. And I think it's only it's partly a function of extraordinarily challenging set of supply shocks that we've been dealing with now for 5 6 years. [clears throat] Thank you so much, Chair Powell. Selina Wang with ABC News. Are you confident that Kevin Warsh will stand up to political pressure from President Trump?
So, he he testified very strongly to that effect in his hearing and I and I'll I'll take him at his word. And when it comes to gas right now, it's over $4 a gallon. Inflation just hit a two-year high. Should Americans expect to be paying higher gas prices for the rest of this year? And in your view, does that take a rate cut off of the table?
And secondly, by staying on as uh Fed governor, what message do you think you're sending to the president? I I don't know what gas prices are going to do for the rest of the year. And um it will depend on how long the strait remains closed and how quick quickly it can be reopened and that kind of thing.
But remember, when gas prices go up um that's disposable income coming out of people's pockets. So, they're going to spend less on other things. So, there will be a hit to GDP. So, it's a you know, it's a it's a question whether spending you know, goes down uh to offset the inflationary effects. So, it's not the answer isn't obvious.
Uh ex ante whether you whether you should move your rate over because of that. We'll have to see how it evolves. And the message that's sent to President Trump by staying on? I'll stand on what I said earlier. [clears throat] Uh Victoria. Hi, Victoria Guida with Politico. Um during your tenure, Fed independence has come under pressure in a lot of different ways.
And I was just wondering practically speaking, where do you see Fed independence as coming from? Is it the law? Is it political support from Congress? Is it the actions of the Fed? What what sustains Fed Fed independence? Well, it's you know, it's it's to to a significant extent it is the law. And you know, we've had to go to court to successfully so far to defend it.
But you know, the the law does create a setting in which the Fed can and is directed to um make monetary policy without consideration of political factors. And so so part of it is the law. But but it goes beyond that though. There's a set of customs. There's there's a boundary line between the Fed and the administration between the Fed and the Treasury Department.
And we need to respect those continue to respect those boundaries about what the Fed is responsible for and what the Treasury is responsible for and what the the rest of the administration is responsible. So, some some of it is legal. Um in fact, it's all legal at the end of the day, but there it's it's more than just monetary policy.
We you know, we don't we don't want to use our tools to we haven't wanted to use our tools to achieve goals that are really clearly outside our mandate. Every administration looks at our tools and thinks it would be good to repurpose those to serve other purposes. But that gets it dragged that's dragging us into politics and in in the fiscal policy.
So, we've resisted that. Well, maybe another way of asking it too is do you think that Fed independence is as strong now as when you became chair? And if so, why? Look, I think it's at risk. I mean, I think these these you know, these legal assaults if you will as I mentioned, you know, we're the institution is being battered over these things.
We're having to resort to you know, the courts to to enforce our legal you know, in not I don't even it's not so much independence. It's it's really the ability to do monetary to make monetary policy without political considerations. That's what we're talking about. And uh we've had to do that and we've been successful so far, but that's not over.
None of that is concluded yet. And it's you know, it's really important. It's not about it's not about people who work at the Fed or the institution. It's about the benefits of a central bank that makes decisions based on analysis and our best thinking. Uh it rather than you know, trying to help or hurt politicians.
It's you know, that there's there's a bright line in central banks who do one and do the other. And successful countries have uniformly you successful advanced economy countries have a really strong set of protections around their central bank just for that reason. So, that's what it's all about. I you know, I I think I am confident as I said in my remarks that the Fed will continue to make its decision based on analysis, rigorous analysis, and not on political considerations, but we've had to fight for it.
And I you know, I'd like to think that you know, I'd like to think we can get out of that era and go back to respecting you know, what the law says and what custom has been, which is to you know, let the Fed do our thing. We're you know, we're we're not we're it's a it's an institution full of human beings who work super hard to get things right for the benefit of the public.
We're all human. Don't expect for perfection, but do expect us to make you know, decisions without political considerations and and the very best analysis we can bring. Katarina. [clears throat] Katarina Saraiva, Bloomberg News. Um how would you characterize um what you've heard from your colleagues on your decision to stay?
Um do you have their support? And then have you heard concern from your colleagues um about continued legal attacks from um the executive branch? Is this something that others have uh you know, talked to you about? So, that I think that um I I don't want to report on what my colleagues think. They can they can speak for themselves, but you know, there yeah, there are there widespread concerns that these things may continue.
That's all that's all I'll say and uh you know, and that would be a problem. And um So. [clears throat] Um and then I just also wanted to ask about um Governor Waller's speech on the Reserve Banks. Um what you know, do you have any thoughts on on centralizing some of those functions in the way he described?
And then um have you know, do you are you concerned that something like that could potentially be a slippery slope to um you know, to consolidate Reserve Bank functions even more in such a way where you you know, the Central Bank ultimately loses some of that important regional information? So, we try to be good stewards of the public's money and efficient.
And Chris in particular, Chris Waller is particularly passionate about that. Of course, so are the Reserve so are the presidents and you know, it's a question of how do you accomplish it? Uh we we of course and and Chris said this in his speech. We you know, we want 12 strong independent central banks with their own staffs and their own monetary policy views and all that.
But you know, there are things that are done in all 12, which could well be done at one much more efficiently and with cost savings. And so, there's a back and forth going on on that. But everybody everybody's on the same page. The other thing he touched on was was uh the idea of removing Reserve Bank presidents from office over different different views on monetary policy.
And I would I would just agree with him so strongly that that would be the beginning of the end of of the Fed's ability to to make monetary policy independently. If every administration could come in and do that, you're you're just another cabinet agency at that point. So, that's not something that I would support.
Chris said the same thing. Christine. [clears throat] Thanks, Chair Powell. Christine Romans, NBC News. I want to ask about legacy. When the history books are written, how do you think your stewardship at the Fed will be remembered for the past 8 years? You know, I'm going to just say that uh that's for that's for someone else to say.
I'll give you a mulligan on that. [clears throat] All right. I'm going to ask you about uh misbehaving inflation then. You talked about those four big shocks, supply shocks over the past 5 years, and in inflation still misbehaving. What's your message to American families who feel like inflation has not been under control for them really since since the COVID reopening?
You know, we're we're committed to bring inflation back down to 2% and and sustainably. That's that's our goal and we will we'll stick at it until that happens. We keep getting these events keep happening, which keep driving up costs. And you know, the best thing we can do is to use our tools to guide inflation back down to 2%.
I think trying to get there really quickly could be very costly in terms of of of job loss and things like that, but we try to get there over time in a way that does the least damage possible. And you know, our commitment to that is never-ending and unshakable. How would you describe the economy outside of the misbehaving inflation?
I mean, um it's still awfully resilient given all of the blows. I don't know that you can be awfully resilient. So, it's actually quite resilient, I would say, cuz it's a positive thing if I can if I can have that amendment. Yeah, that that you know, growth is really solid across our economy. Some of that is um that consumer spending is hanging in pretty well.
The the most recent data are good. And some of it is just the apparently insatiable demand for data centers all over the United States. So, a lot of business investment going into building data centers and every reason to think that that continues. So, you've got an economy that's growing at 2% or better.
PDFP, which is private domestic final which is really a a better signal of of uh of a momentum in the economy is actually higher than that. So, that's you know, that's a positive thing. The if you look at the unemployment rates, 4.3%. So, that's a low rate. That's pretty close to mainstream estimates of the natural rate.
We've been there for a long time. So, it's it's it doesn't feel like a good labor market to some who do don't have jobs because quits are really low, hires are really low, and there's effectively no new net job uh creation. So, that's a that's you know, in a sense the labor market is in balance, but it's an unusual and uncomfortable kind of a balance where people who don't have jobs will have a hard time breaking in unless somebody quits their job.
So, um so that's pretty good. You know, inflation is the thing we need to work on. And it's partly tariffs, which we think we think that that inflation should subside over the course of this year because it's it's kind of a one-time increase. It shouldn't be repeated. And that should start happening pretty soon.
The energy in inflation that we're getting should go through fairly quickly. Uh and we'll we'll just have to see how that works out. In the meantime, you know, we think our policy stance is in a good place for us to hold and and wait developments. Jennifer. [clears throat] Thank you, Chair Powell. Jennifer Schonberger with Yahoo Finance.
At the risk of beating the dead horse here, clearly three members objected to keeping that easing bias in the statement. [clears throat] And you said that the majority still didn't need uh still didn't need to uh move to new language at this point. So, does the majority of the committee still have a bias towards cuts at this point or has the bias on the committee shifted away from cuts towards holding or hikes if that was needed?
I So, I think that you know, the the center is moving toward a more neutral place. And that's sort of what markets are saying, too. I just think you know, uh there's a lot of signaling going on when you change guidance like that. And so, we we just I guess the major a majority of us didn't feel like we needed to send a signal on that right now.
Uh and but maybe it'll come to that. And the and the reason is because you know, we're kind of waiting to see what happens with with events in the Middle East and what are the implications of those events for the US economy. So, there was just a there's a group who feels like we don't need to be in a hurry to do that.
We we get it. And of course, we will move to a hiking bias if we want to hike and we'll move to a new a neutral bias before that. But there was a difference over whether to do it at this meeting at at a meeting at which all but one of us agreed that that the that the rate decision was correct, which was not to move.
And you just said moments ago that [clears throat] you believe Fed independence is at risk. Is it safe to say that you want to stay on as a governor to serve as a check and balance on that? I I want to stay until I I will stay until it's a I feel it's appropriate for me to leave. And and yes, that is that is really what is driving this.
Uh I'm not uh I'm not looking to be you know, a high-profile uh dissident or anything like that. I I'm I'm more looking at the other aspects of this and wanting to see that things have calmed down and and we're returning to a traditional model of working with the people that you have and bringing them to consensus and respecting that consensus.
That's what that's what I'm I'm hoping to see. Matt Egan. Thanks, Chair [clears throat] Powell. Matt Egan, CNN. Uh you've made many tough decisions in your time at the Fed. And as your time as chair comes to a close and you think about your tenure and perhaps your legacy, are there any decisions that stand out as ones that you're particularly proud of?
And are there any that with the benefit of hindsight you would take a mulligan on? Yeah, I as I it's hard to I wouldn't want to single single out individual things at this point. You know, I'll just say uh you know, we all of us together have consistently tried to do what we think is best for the American people based on our tools and our objectives that that Congress has given us.
It's been very challenging because we've been in the situation of supply shock supply shocks really for 6 years. And it that's just a very different situation than for very long time what the Fed and other central banks were doing all the time was demand management. And you know, and there was always the inflation mandate, but inflation was low for 25 years.
So, this is a very different world and a much more challenging one where you have to balance the two objectives. And by the way, central banks that have a an inflation mandate have to do exactly the same thing because they're balancing economic activity. So, that's been challenging and we've you know, we've tried to do our very best through these really challenging times and I'm really proud of of uh the work that I've done that my that my colleagues and I have done during these these years.
To follow up on some of the the discussion around Fed independence, [clears throat] can you explain to the public why this notion of Fed independence, which might sound kind of wonky to some, is so critical? I mean, what are the consequences if either the Supreme Court rules against Lisa Cook or the Fed in the future decides to make decisions more around the political calendar instead of the economic data.
So, every major advanced economy in the world has made the same decision the United States has made. And that is that they want to take the making of monetary policy, the setting of interest rates to support the economy to achieve maximum employment and price stability. They want to take that out of the direct control of elected politicians.
And the reason is elected politicians are always running for election and they'll always want low rates and that will re- lead to inflation over time. So, after you know, literally centuries of experience with that, the whole world moved to a different model. And it's it's worked great. I mean, this is this is the era in which inflation was under control for 40 years.
Then we had the pandemic inflation everywhere on the in the world and now we have inflation that had gone pretty much all the way back to target for really close to all the way back to target and now is being buffeted by the energy shock in the US buffeted by the by the tariff shock as well. So, but what I would say to the general public is that's that's the back story is that um it don't think of about it in institution being independent.
Think about it this way that you want people to make monetary policy and set interest rates to benefit the general public and to try to achieve economic goals which are maximum employment and price stability and focus only on that and ignore political considerations completely. Ignore them. It's This isn't bipartisan.
Good afternoon. Uh my colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefits benefit of the American people. The US economy has been expanding at a solid pace. While job gains have remained low, the unemployment rate has been little changed in recent months.
Inflation has moved up and is elevated in part reflecting the recent increase in global energy prices. Today, the FOMC decided to leave our policy rate unchanged. We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2% inflation goals. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook and we will remain attentive to risks to both sides of our dual mandate.
I'll have more to say about monetary policy after briefly reviewing economic developments. Recent indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient and business fixed investment has continued to expand at a brisk pace. In contrast, activity in the housing sector has remained weak.
In the labor market, the unemployment rate was 4.3% in March and has changed little in recent months. Job gains have remained low. A good part of the slowing in the pace of the job growth over the past year reflects a decline in the growth of the labor force due to lower immigration and labor force participation.
Though labor demand has clearly softened as well. Other indicators including job openings, layoffs, hiring, and nominal wage growth generally show little change in recent months. Inflation has moved up recently and is elevated relative to our 2% longer run goal. Estimates based on the consumer price index and other data indicate that total PCE prices rose 3.5% over the 12 months ending in March boosted by the significant rise in global oil prices that has resulted from the conflict in the Middle East.
Excluding the volatile food and energy categories, core PCE prices rose 3.2% over the 12 months ending in March. This relatively high rate largely reflects the effects of tariffs on prices in the goods sector. Near-term measures of inflation expectations have risen this year likely because of the substantial rise in oil prices.
Most measures of longer-term expectations remain consistent with our 2% inflation goal. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today's meeting, the committee decided to maintain the target range for the federal funds rate at 3 and 1/2 to 3 and 3/4%.
The economic outlook remains highly uncertain and the conflict in the Middle East has added to this uncertainty. In the near term, higher energy prices will push up overall inflation. Beyond that, the scope and duration of potential effects on the economy remain unclear as does the future course of the conflict itself.
We will continue to monitor the risks to both sides of our dual mandate. We are well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving outlook, and the balance of risks. Monetary policy is not on a preset course and we will make our decisions on a meeting by meeting basis.
[clears throat] This is my last press conference as chair and I will close with a few thoughts. First, I want to congratulate Kevin Warsh on his advancement out of the Senate Banking Committee this morning. This is an important step forward and I wish him well as that process continues. The Federal Reserve exists for one fundamental purpose, to foster the economic conditions in which American families and businesses can thrive.
Stable prices, a strong job market, and a financial system they can depend on. Every decision we make, whether about interest rates or regulatory and supervisory matters or other issues, is made in service of that purpose. Our decisions reflect the collective judgment of the Board of Governors and the Federal Open Market Committee, colleagues who demonstrate analytical rigor, principled judgment, and a genuine commitment to the public interest.
Our collaborative and deliberative process has long reflected a shared commitment to finding common ground in service to our mission. This institution is resilient, capable, and staffed by professionals of extraordinary talent and exceptional dedication. It has been a privilege to serve alongside so many great public servants at the Board of Governors and around the Federal Reserve System.
The Fed's work is only as effective as the public's understanding of it and you, the press, are essential to keeping the public informed about we about what we do and why. The people we serve benefit from your careful reporting. I welcomed the announcement [clears throat] last Friday by the US Attorney for the District of Columbia that she had closed the criminal investigation.
She also noted, however, that she would not hesitate to restart the investigation. Over the weekend, the Department of Justice provided assurances that they will not reopen the investigation unless there's a criminal referral from the Fed's Inspector General. And absent such a referral, if they do appeal the recent court decision, they would not seek as part of that appeal to restart the investigation or send new subpoenas.
[clears throat] I've said that I will not leave the board until this investigation is well and truly over with transparency and finality and I stand by that. I'm encouraged by recent developments and I'm watching the remaining steps in this process carefully. My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve.
After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined. I plan to keep a low profile as a governor. There is only ever one chair [clears throat] of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.
Once sworn in as Board Chair, his new colleagues will elect him to chair the FOMC as well. As I regularly point out from this podium, our success in delivering our goals matters for all Americans. I'm confident that that the Fed will continue to do its work with objectivity, integrity, and a deep commitment to serve the American people.
Thank you and I look forward to your questions. [cough and clears throat] Thank you, Mr. Chair. Appreciate the kind words about the press. Often doesn't come from the podium in different places, but appreciate that. Um can you talk about what has gone into your decision to remain on the board? What kind of criteria are you weighing and how long might you stay?
Thank you. Sure. So, you know, my [clears throat] my concern is really about the series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors. And I I want to note here, this has nothing whatever to do with verbal criticism by elected officials.
Uh I I've never suggested that such verbal criticism is a problem and neither has anyone else here. But these legal actions by the administration are unprecedented in our 113-year history and there are ongoing threats of additional such actions. I I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors.
It is so important for our economy, for the people that we serve, that they can depend over time on a central bank that operates that way, free of political influence. It's part of the absolute foundation of this amazing economy that we have. It's just one of the many reasons why the US economy is the envy envy of the world.
That piece of institutional architecture separates successful countries from unsuccessful countries. It is extremely important, not for the people who work at the Fed any given time, but for the people that we serve, that the Fed remain able to conduct monetary policy in a way that doesn't get pulled into politics, trying to help or hurt any particular politician or political party.
It's critical for the people that we serve. In terms of when I would leave, I I will leave when I when I think it's appropriate to do so. Is that all your questions or was there Well, I just have a follow-up, which is what would you say [clears throat] to the criticism that by remaining on the board you're actually taking a political act in denying uh President Trump the majority of the board, which as president he would have if you left.
I I don't see that at all. As I mentioned, uh you know, I'm literally staying because of the actions that have been taken. I had long planned to be retiring and uh you know, the things that have happened in really in the last 3 months of of I think left me no choice but to stay until till I see them through at least that long.
Um you know, in addition, uh I don't see how this will interfere. I'm not My intention is not to interfere. You know, I was a governor for almost 6 years and the tradition is at the Fed that governors uh who understand how difficult the role of chair is and as a as a soon-to-be former chair I do understand how hard it is to get consensus with 19 strong-minded people, you work with the chair, you you try to you try to uh be heard, but also collaborate with the chair and try to support the chair when you can.
When you can't, you can't. And I think that's the attitude that people generally take and that's the attitude that I'll take. Uh Nick. Uh Chair Powell, if I could ask about the inflation outlook. In March you described the standard practice of looking through energy shocks as conditional on inflation expectations staying anchored.
Since that meeting, there has been very little progress reopening uh key energy trade corridors. Can you help us understand how the inflation outlook has changed in the intervening period, beginning with the prospects for tariff pass-throughs resolving on the timeline that you had outlined in March before getting to the energy shock that is now on top?
So, you know, I would look at it this way. Um for a long time we've been working on on the hypothesis really that tariff tariffs would would lead to a one-time price increase and that that would go away over time. In other words, that there would be no further change, so measured inflation wouldn't reflect that higher level going up more and more.
And it's time for that to happen. You know, we really do expect that to be happening in the next two quarters. So, we'll be watching very carefully to see that what we've thought all along would happen. That's the kind of critical part of the forecast. We we need to really see that. With with energy, it's it's so hard to say.
Um I I mentioned, you know, in you know, sort of the textbook, you you would look through it an oil shock because they tend to be short-lived and they tend to revert and monetary policy works with long and variable lags, so you you know, you wouldn't necessarily react right away. I think that is all the more true given that we're several years above 2% inflation and that we're already looking through the tariff shock.
So, I think we're going to be very cautious about that. It's but the the question about looking through energy really is not not in front of us right now. We It hasn't even peaked yet. And I think we'd want to see the backside of that and progress on tariffs before we even thought about uh about reducing rates.
So, if I could [clears throat] follow up, the the statement today preserves language that has taken on some meaning uh as it was socialized when the committee was actively lowering rates. Why is that easing bias still uh ripe given how different the inflation outlook is now versus a meeting or two ago?
And what more would have [clears throat] to happen for it to get evicted? So, um that was uh as you will recall, we we had a discussion about that at the last meeting and we talked about it in in the press conference after the March meeting. We had the same today. We had quite a vigorous discussion about that that very issue and the guidance and is it still appropriate and that kind of thing.
And I would say that the, you know, number of people on the committee who either could support that language change, changing to a more neutral stance so that a hike is as as likely as as a cut, uh that number has increased over the intervening period and it's easy to see why. I mean, it's it's it's it's it's a good question, right?
You see inflation has moved up over the interim a bit. Core inflation is 3.2 now, moving albeit just a little bit in the wrong direction. And we we know that there will be you know, that there's uh headline inflation coming out of the Gulf and we don't know how much that will be. We just we're going to need to see.
So, it makes all the sense in the world that people would look at that and and we'd have a vigorous discussion about that. You saw the three people dissented over the language. I think all of those people agreed with the with the rate decision. Um so, the majority of the committee did not want to do that and and and I I was I didn't think we needed to do it this meeting.
It really was just a question of what's why do we need to do that now? You know, we have so much to learn, there's so much uncertainty about the path ahead. There doesn't need to be any rush to make that decision now because, you know, what what happens in the next 30-60 days, even by the next meeting, could really change the picture around that around that language.
So, you know, it was a it was a it's a close it's it's a much closer thing on the committee that it was in March and you know, that makes all the sense in the world, it seems to me. Claire. So, Claire Jones, Financial Times. Um just just going back to this issue of the the easing bias. Um we've now got oil approaching $120 a barrel when it comes to the benchmark.
Um Brent crude. Um if it stays around those levels 6 weeks from now, what would be your guess best guess as to whether the easing bias will still be in the statement? Thank you. I I wouldn't want to guess. You know, well, first of all, we're going to have new leadership in all likelihood by then and and new leadership's going to have a very important role to play in that, so uh I won't be standing here at this podium to answer your questions, so um I don't know.
As I mentioned, that's all I can really say is that we had we had a great discussion about that today. It's a you know, it's it's got it's gotten to be a better question in the interim period. We had the discussion. A majority are still on the page of of not feeling the need to move to that level and I I that's where I am.
Uh I I get it though. You know, at a certain point you would move and that that conceivably could come as soon as the next meeting. Thank you. Just to follow up, um [clears throat] the new leadership also seem rather lukewarm on press conferences and on the dot plots. What would your advice to him be on these communication tools?
So, I'm I'm not going to give him any advice through you today here, but I've, you know, I think communications generally is I think every incoming chair takes a look at communications and it's a very healthy thing. I mean, communications is it's very complex and uh you know, you can always be be looking at new things.
And and I if that happens, feels like it's going to happen, that's completely appropriate thing. Neil. Hi, Chair Chair Powell, Neil Irwin with Axios. [clears throat] Um can you tell us if you've been in touch with with incoming Chairman Warsh? Any To what extent is this a normal transition process versus all the things swirling around something unusual and and what can we expect when when he takes takes that podium in a few weeks?
I I haven't seen him since seeing him at a dinner in January where I congratulated him and had a nice nice chat with him. Haven't seen him. I don't know what a normal process is, you know, the the last process was with Janet Yellen who with whom I had worked for 6 years and so it was uh you know, we were sitting down the hall from each other, so it was a very different thing.
I think I think this is and will be a very normal standard kind of a kind of a transition process, so that's that's what I expect. I have every reason to think it will be. Quick follow-up, is the Supreme Court ruling on Governor Cook a factor in when you may leave as a governor? I wasn't thinking of it as such, but no, not really.
I mean, I'm thinking more of the other things I mentioned. [clears throat] Chris. Hi, thanks for taking our question. I wanted to ask a question about your tenure and Chris Rugaber at Associated Press. Um during your tenure as chair, you often spoke about how disadvantaged Americans benefited from extended periods of low unemployment.
Uh in the new framework the Fed adopted in 2020, some economists say elevated the Fed's employment mandate. Uh are you worried that the the pandemic inflation spike that followed will make future Fed chairs more reluctant to pursue a hot jobs market and should they be? Um I don't know the answer to that.
I mean, what we So, what we experienced um in in the in the teens, the mid-teens, was uh really low low levels of unemployment for a long period of time and no reaction from inflation. And we all took very much took notice of that. We also noticed that the biggest wage gains were going to people at the bottom end of the income spectrum.
And we had many many reports of uh I mean, it felt like a fairly stable equilibrium and a lot of benefits were flowing to people at the bottom end of the uh income spectrum, including companies were, you know, setting up in um in you know, people who were confined and and like training them before they got out and it was it was a very healthy sort of set of societal dynamics.
So, of course, I think anybody would love to get back to that. Um I I don't think that anything that happened to create the the global pandemic inflation was in any any way related to overweighting the employment market. I mean, it was a it was a global shock that happened essentially very very similarly all over the world that had to do with closing, reopening, stimulus, and all that.
And I mean, you could you could look at it a graph of 10 big economies on the page and not know which was the US and which was Germany, France, and things like that. So, I don't think that that that insight was in any way responsible for the high inflation that we experienced. So, I mean, I think it's always been a balance.
Uh uh you you've got to you've got to be strong on both of our dual mandates. And we we just we For example, now we we don't feel that the labor market's at all a source of inflation. So, we don't need to be worrying about that. It's been a long time since we have had to worry about that. Well, actually during the during the pandemic recovery, the labor market was super overheated and tight and that's when we had to worry about it, but but not now.
And just on the other [clears throat] issue, um are you Would you need Do you need more assurances from the Justice Department before stepping down? Is that what you're waiting for or what else? I'm waiting for for the for the investigation to be well and truly over with finality and transparency. And I'm I'm waiting for that.
And I will leave when I think it's appropriate to do so. Michael McKee. [clears throat] Michael McKee from Bloomberg Television and Radio. I'd like to ask you if you could explain a little more or characterize a little more the discussion about the two-sided view and interest rates because there were some members of the Open Market Committee who've been suggesting that we may need to raise interest rates even absent the war because inflation was not coming down fast enough.
Uh is there any sense that interest rates might have to go up or was this just a setup to sort of uh warn people that you're worried about the war impacts? So, nobody the three dissenters and and others who could have supported that and others who were, you know, who were voters and prefer non-voters who preferred it, they all supported the right decision, right?
So, people are not saying we need to hike now. It's more a question of, you know, don't we kind of feel that we should be neutral? And markets are our markets What are markets doing? People argued that's this is consistent with markets are doing. And again, it's a it's a very fair question, but, you know, these these changes there is, you know, it's a form of forward guidance and you want to make you don't want to make them you want to make them in a way that that will be sustained and continue to make sense and not something you need to take back uh you know, fairly quickly.
So, I I think we just a group of us, including me, didn't feel like we needed to be in a hurry on that that that markets are not confused about our reaction function. We don't have a problem to solve on that. But the other side of the argument is a good argument, too, as I as I mentioned. It's a perfectly good argument to be having, good discussion to be having.
So, and it came out the way it came out. Well, you've got three dissents [clears throat] in favor of two-sided warning. You've got yourself staying on the board. You've got the criticism that does come from elected officials and you've got a lot of critics who have faulted the Fed for being too slow 2021 with inflation.
Are you worried about Fed credibility under all of this? Is that one reason that you want to stay on? Not not driving my my thinking now. I mean, monetary policy is going to get made by, you know, 19 people. There's a lot of stability there. Uh I mean, if you think about it, any every new Fed Fed chair has the same situation, which is you've got 18 colleagues on the FOMC, 11 of them vote during any year, and you have to your job is to create consensus.
It's it's to talk to them, understand them, you know, be inside their thinking, and be able to pull them together and and get consensus and move. And that's that's what every Fed chair has to do. And I I think Kevin Warsh is actually quite well He has the capabilities, skills to be to be very good at that, I would think.
So, I think I I'm not so worried about that process, you know, I think that'll that'll work itself out. [clears throat] Powell. Uh thank you, Chair Powell. Howard Schneider with Reuters. You you mentioned that staying on as a governor, you intend to keep a low profile. Well, I'm just wondering if you could give us a little more detail on what that looks like and how you can tushay.
Um what that Yeah, walk down the steps. Uh what that looks like and particularly around the policy discussion, how you're able to to have your intervention and not be a shadow chair, not have a kind of an outsized influence over the process. Yeah, you know, that's just something I would never do, you know, the shadow chair thing.
No, you know, I it's it's I don't know what the exact specifics of it will be, but I'm going back to being a governor. I respect the role of chair. I, you know, I was a chair I was a a governor for 6 years and I know what that's like. I know what and I I had a you know, pretty front row seat with particularly with with Chair Yellen, to whom I I was close when I when I I was worked with Chairman Bernanke for 2 years, but um you know, I I I was brand new at that time.
So, I got a a sense of what it was and I had real sympathy for how hard it is to get that group to consensus and I always felt like I, you know, I don't want to add to that unnecessarily and that means try to support the chairs where the chair the direction the chair wants to go in if you can. If you can't, you can't.
But and I think that's that's the way it's always worked there cuz the chair only has one vote plus the ability to develop consensus. And if people won't be, you know, they they won't if they're not flexible at all, then how do you ever do that? And so, that's why the chair has the authority the chair has really is to develop relationships with people and work with them and then and then put something forward that has consensus.
And I you know, I I I propose to be a very constructive participant in that process uh really out of respect for for the office of the chair. And uh in your view as a a soon-to-be governor, how do you see the risks of oil prices bleeding into core inflation in coming weeks? Because that was it seems like the commentary that was coming from particularly some of the Reserve Bank presidents, they were elevated concerns about the bleed into core.
And, you know, here we are with three dissents now. What do you see as the prospect of core inflation? those prospects are real. Remember though, our our They're real and the real thing is we're going to have to wait and see. We're going to need to see. And the good news is we think our policy stance is just is in a very good place for us to wait and see.
We, you know, we're right kind of at the high end of neutral or perhaps mildly restrictive. Um the labor market shows more and more signs of stability, whereas inflation is kind of misbehaving. And so, maybe a little bit of uh of restriction or the high end of neutral is just the right place to be. So, we can wait here and see uh and see how things work out before we act.
And we'll see how much that you know, how much does come through into core. You see it already in air airfares, of course, but you may see it in many other places. Uh you know, we just don't know yet and it's it's so unknown because how how long will the strait be closed? You can develop any number of scenarios that you want, but we really won't know till we know.
So, fortunately, we're in a good place to to to wait and wait and let things develop. [clears throat] Uh thanks, Mr. Chairman. Um you started holding post post-meeting press conferences for every meeting as opposed to the ones with just with SEPs. Can you talk about why you see that as a net positive?
So, we um we always said when we were doing quarterly press conferences, we always said we can move at any meeting, but we only ever moved at the quarterly SEP meetings where we had the press conference. So, if you think about it, you know, we during the pandemic, we were moving like a lot at every meeting and sometimes between meetings.
And doing that without press conference, I think would have been quite challenging. It's become the industry norm. Uh it's the standard. I don't know whether that has to remain that way. I don't know. I mean, I it's it's just something people have become used to and I do think it's quite helpful to, you know, to uh I mean, I I I try to deliver a message on behalf of the committee rather than 18 people 18 other people going out and delivering their message and it's, you know, it's going to be all over the place cuz we do, thankfully, have widely disparate views.
Um okay, thanks. The [clears throat] other thing I wanted to ask about was the communications review from last year. Um uh Could you describe the debate last year, what changes were considered, what you wanted, and what prevented action um any action on the on the on those changes? So, yeah, I'm not going to go into the the real small specifics, but what we found very quickly was that um making making changes making really large changes for example to the dot plot or the SEP um it didn't have we couldn't come up with anything that had really broad support on the committee.
And and so we just moved on. We didn't we we didn't really do as much on on that as we might have. And you know, I was never the world's biggest fan of the dot plot, but you you can't can't beat something with nothing and you know, there's a that we've looked at a bunch of things and uh you know, it's something I like I said I think every new chair is going to look at our suite of communications.
And and think about what would be changes. We we are the only major central bank that doesn't publish a forecast. And that's because we have a 19-person committee and you know, you try to do it you try to do that on the at the board that's hard at the at the committee that's hard. Uh it's hard if you do it at the staff.
So it it's you know, it's been it works. I think our communications are fine, but looking at doing it in a different and better way is the most natural thing in the world. [clears throat] Thank you. I'm Colby Smith with The New York Times. If I could follow up on Mike's question about hikes, are we right to assume that the [clears throat] hawkish outcome for the Fed is still one in which the committee just extends the pause in rate cuts?
And to what extent is there a growing sense within the committee that monetary policy really isn't just restrictive at all right now? Um the economy is holding up relatively well despite this major energy shock, the unemployment rate has ticked lower, inflation was moving sideways even before the war and is now moving higher.
Um so so where is the committee at on that debate? You know, where we're at is we think our really we think our policy rate is in a good place. Um if we need to hike we will we will certainly signal that and we will and we will certainly do it. And if we need to to cut then if it's appropriate to cut then we'll we'll signal the opposite.
I think we because we feel like we're we're in a good place to move in either direction. Um nobody's calling for a hike right now. Um so it really is going to depend on how things how things evolve and you know, that that's really where it is. You know, as I mentioned close you know, much closer question this cycle on changing the guidance, but but ultimately we didn't.
And as it relates to the war, at what [clears throat] point do you think the risks to growth will be larger than the risks to inflation as this conflict drags on? You know, you you just have to find that out empirically. You know, with given our um the fact that we're you know, a big exporter of energy and that our economy is far less energy intensive oil intensive than it was during the '70s.
Um you know, the the effects on the United States are really substantially less than those of Western Europe or or Asia who are feeling much greater effects from from these things. Our effects we're feeling in you know, in the current situation currently. And in in sort of what's priced in which is you know, a relatively quick outcome.
If if this goes on for much longer and prices go much higher then we'll feel that much more. And of course [clears throat] I'm talking about aggregate inflation numbers. We know we're very well aware that people are experiencing higher gas prices all over the country now. And [clears throat] that hurts.
That's and these are those those hikes may continue to happen. Uh and other other things are going to start to reflect air airline fares I've mentioned and and other other products and services that are dependent upon petroleum and derivatives of petroleum. People are going to start to feel that. Edward.
Thank you [clears throat] thank you Chair Powell. Edward Lawrence with Fox Business. So I guess I'll just ask you directly on this. The markets don't see a rate cut at all this year is what they're predicting. Do you think that we are at the neutral rate? Why or why not? You know, the the neutral rate is a we cannot know it with with certainty.
I think pretty close to the neutral rate. Yeah, I I always had it you know, between 3 and 4%. We're a little north of 3 and 1/2. So that's well in the range of what I consider a reasonable reasonable, but at the higher end of the range of what I would consider reasonable neutral rate. Um you know, I think you're the the labor market is still probably cooling off just a little bit.
Um and I I I don't think there's a much of a case for any case really for the for uh policy looking you know, meaningfully restrictive maybe mildly restrictive or neutral I would say. Um and I want to follow up on some of the other questions [clears throat] about your future a little bit. The the first time we've seen the four dissents now since October of 1992.
Are you handing off a divided Fed? You know, the thing [clears throat] to remember is uh uh we have always had vigorous debates and and uh they're excellent debates. I have to say they're they've been really good. Uh and we're we're in an unusually difficult situation. So we've we've really had four supply shocks.
You can actually you can you can say more than four, but at a minimum we've we had the pandemic we had the invasion of the of Ukraine, we had tariffs and now we have Iran and the oil um you know, the oil spike. So those every every supply shock has the capability of right driving inflation up and unemployment up.
And and what do you do? You know, you're it's it's the central bank has a really hard time knowing what to do. So the right thing to do is to try to balance the achievement of those two goals and that's what our framework calls for us to do. But these are really tough difficult judgments. You've got to have a forecast for each variable.
You've got to think how long it's going to take to get back to target. You got to think how how restrictive or not is policy. So it's only natural that you have a range of views on the committee. You know, people are going to see it different ways. They're going to have different risk tolerances and that kind of thing.
I mean if everybody agreed that would be that would be surprising. And I think it's only it's partly a function of the extraordinarily challenging set of supply shocks that we've been dealing with now for 5 6 years. [clears throat] Thank you so much Chair Powell. Selina Wang with ABC News. Are you confident that Kevin Warsh will stand up to political pressure from President Trump?
So he he testified very strongly to that effect in his hearing and I and I'll take him at his word. And when it comes to gas right now it's over $4 a gallon. Inflation just hit a two-year high. Should Americans expect to be paying higher gas prices for the rest of this year? And in your view does that take a rate cut off of the table?
And secondly, by staying on as Fed governor, what message do you think you're sending to the president? I I don't know what gas prices are going to do for the rest of the year. And um it will depend on how long the strike remains closed and how quick quickly it can be reopened and that kind of thing.
But remember when gas prices go up um that's disposable income coming out of people's pockets. So they're going to spend less on other things. So there will be a hit to GDP. So it's a you know, it's a it's a question whether spending you know, goes down uh to offset the inflationary effects. So it's not the the answer isn't obvious uh ex ante whether you whether you should move your rate over because of that.
We'll have to see how it evolves. And the message it sends to President Trump by staying on? I'll stand on what I said earlier. [clears throat] Victoria. Hi, Victoria Guida with Politico. Um during your tenure Fed independence has come under pressure in a a lot of different ways. And I was just wondering practically speaking, where do you see Fed independence as coming from?
Is it the law? Is it political support from Congress? Is it the actions of the Fed? What what sustains Fed Fed independence? Well, it's you know, it's it's to to a significant extent it is the law and you know, we've had to go to court to successfully so far to defend it, but you know, the the law does create a setting in which the Fed can and is directed to uh make monetary policy without consideration of political factors.
And so and so part of it is the law. But it goes beyond that though. There's a set of customs. There's there's a boundary line between the Fed and the administration between the Fed and the Treasury Department. And we need to respect those continue to respect those boundaries about what the Fed is responsible for and what the Treasury is responsible for and what the the rest of the administration is responsible So some some of it is legal.
Um in fact, it's all legal at the end of the day, but there it's it's more than just monetary policy. We you know, we don't we don't want to use our tools to we haven't wanted to use our tools to achieve goals that are really clearly outside our mandate. Every administration looks at our tools and thinks that would be good to repurpose those to serve other purposes, but that gets it dragged that's dragging us into politics and in in the fiscal policy.
So we've resisted that. Well, maybe another way of asking it too is do you think that Fed independence is as strong now as when you became chair? And if so, why? Look, I think it's at risk. I mean I think these these you know, these legal assaults if you will as I mentioned, you know, we're the institution is being battered over these things.
We're having to resort to you know, the courts to to enforce our legal you know, not I mean it's not so much independence. It's it's really the ability to do monetary to make monetary policy without political considerations. That's what we're talking about and uh we've had to do that and we've been successful so far, but that's not over.
None of that is concluded yet and it's you know, it's really important. It's not about It's not about people who work at the Fed or the institution. It's about the benefits of a central bank that makes decisions based on analysis and our best thinking. Uh it rather than you know, trying to help or hurt politicians.
It's you know, that there's there's a bright line between central banks who do one and do the other and successful countries have uniformly successful advanced economy countries have a really strong set of protections around their central bank just for that reason. So, that's what it's all about. I you know, I I think I am confident as I said in my remarks that the Fed will continue to make its decision based on analysis, rigorous analysis and not on political considerations, but we've had to fight for it.
And I I you know, I'd like to think that you know, I'd like to think we can get out of that era and go back to respecting you know, what the law says and what custom has been which is to you know, let the Fed do our thing. We're you know, we're we're not we're it's a it's an institution full of human beings who work super hard to get things right for the benefit of the public.
We're all human. Don't expect for perfection, but do expect us to make you know, decisions without political considerations and and the very best analysis we can bring. Katarina. [clears throat] Katarina Saraiva, Bloomberg News. Um how would you characterize um what you've heard from your colleagues on your decision to stay?
Um do you have their support? And then have you heard concern from your colleagues um about continued legal attacks from um the executive branch? Is this something that others have uh you know, talked to you about? So, I think that um I I don't want to report on what my colleagues think. They can they can speak for themselves, but you know, there yeah, there are there are widespread concerns that these things may continue.
That's all That's all I'll say and uh you know, and that would be a problem and um So. [clears throat] Um and then I just also wanted to ask about um Governor Waller's speech on the Reserve Banks. Um what you know, do you have any thoughts on on centralizing some of those functions in the way he described?
And then um have you know, do are you concerned that something like that could potentially be a slippery slope to um you know, to consolidate Reserve Bank functions even more in such a way where you you know, the central bank ultimately loses some of that important regional information? So, we try to be good stewards of the public's money and efficient and Chris in particular Chris Waller is particularly passionate about that.
Of course, so are the Reserve so are the presidents and you know, it's a question of how do you accomplish it? Uh we we of course and and Chris said this in his speech. We you know, we want 12 strong independent central banks with their own staffs and their own monetary policy views and all that. But
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