In his prepared text for the speech in Rhode Island, Powell said:
Fed Chair: downside risks to employment shifted balance of risks, prompting last week's rate cut
Rate cut was another step toward a more neutral policy stance
Two-sided risks mean there is no risk-free path; policy not on preset course
Policy stance still modestly restrictive, well-positioned to respond to potential developments
Economic growth has moderated, downside risks to employment have risen
Inflation has risen, remains somewhat elevated
Consumer spending has slowed, businesses say uncertainty weighs on outlook
Labor market less dynamic, somewhat softer
Unusual and challenging decline in both supply and demand for workers
12-month PCE inflation was probably 2.7% in August, core PCE 2.3%, both up from prior year and driven by goods prices
Goods price increases largely reflect tariffs, not broader price pressures
Reasonable base case is that tariff-driven inflation effects will be relatively short-lived
Disinflation for services continues; most long-term inflation expectations consistent with 2% goal
Tariff increases will likely show up as somewhat higher inflation over several quarters
Will make sure one-time increase in prices does not become ongoing inflation problem
Public trust in economic, political institutions has been challenged, those in public service must focus tightly on critical missions
The stocks are modestly lower with the NASDAQ down 81 points.. The USD has moved modestly higher. Yields are down but off lows
