WASHINGTON (NEXSTAR) – Fed Chair Jerome Powell spoke at a press conference Wednesday after the Federal Reserve decided to keep interest rates at 5.25% for the third consecutive month.
“We are seeing, you know, strong growth that appears to be moderating.” Powell said. “We’re seeing a labor market that is coming back into balance by so many measures and we’re seeing inflation making real progress. These are the things we’ve been wanting to see.”
The central bank has steadily raised rates to combat inflation dating all the way back to March 2022.
“It’s really good to see the progress that we’re making. We just need to see more,” Powell warned.
The Fed’s goal of 2% inflation may prove to be elusive, partially due to November’s job report claiming 3.7% unemployment. The report last week is a remarkable feat given the 6.3% figure in January 2020.
This movement could push inflation back up, as businesses will need to raise wages to retain workers. That wage boost will give many Americans more money to spend, thus pushing demand up on consumer products.
“Forecasters generally,” Powell posited, “were very broadly forecasting a recession for this year. Not only did it not happen, we actually had a very strong year.”
Although Powell declined to make any forecasts about future hikes or cuts, investors are now showing optimism. The Dow Jones closed out at a record high Wednesday, which could point to the markets expecting rates to come down in 2024.
Powell offered a cautionary tone, saying, “It is far too early to declare victory.”
