BREAKING NEWS: Jerome Powell Delivers Shocking Updates After Fed Interest Rate Announcement | AC14

Good afternoon. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. The US economy expanded at a solid pace last year and is coming into 2026 on a firm footing. While job gains have remained low, the unemployment rate has shown some signs of stabilization and inflation remains somewhat elevated. In support of our goals today, the Federal Open Market Committee decided to leave our policy rate unchanged. Having lowered our policy rate by 75 basis points over the course of our previous three meetings, we see the current stance of monetary policy as appropriate to promote progress toward both our maximum employment and 2% inflation goals. I will have more to say about monetary policy after briefly reviewing economic developments. Available 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. In contrast, activity in the housing sector has remained weak. The temporary shutdown of the federal government likely weighed on economic activity last quarter, but these effects should be reversed as the reopening boosts growth this quarter. In the labor market, indicators suggest that conditions may be stabilizing after a period of gradual softening. The unemployment rate was 4.4% in December and has changed little in recent months. Job gains have remained low. Total non-farm payrolls declined at an average pace of 22,000 per month over the last three months. Excluding government employment, private payrolls rose at an average pace of 29,000 per month. A good part of the slowing in the pace of 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 openings, layoffs, hiring, and nominal wage growth show little change in recent months. Inflation has eased significantly from its highs in mid 2022, but remains somewhat elevated relative to our 2% longer-run goal. Estimates based on the consumer price index indicate that total PCE prices rose 2.9% over the 12 months ending in December and that excluding the volatile food and energy categories, core PCE prices rose 3.0%. These elevated readings largely reflect inflation in the goods sector which has been boosted by the effects of tariffs. In contrast, disinflation appears to be continuing in the services sector. Near-term measures of inflation expectations have declined from last year's peaks as reflected in both market and survey-based measures. 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 a half to three and three-quarters percent. Since last September, we have lowered our policy rate 75 basis points or three-quarters of a percentage point, bringing it within a range of plausible estimates of neutral. This normalization of our policy stance should help stabilize the labor market while allowing inflation to resume its downward trend toward 2%. Once the effects of tariff increases have passed through, 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. To conclude, the Fed has been assigned two goals for monetary policy: maximum employment and stable prices. We remain committed to supporting maximum employment, bringing inflation sustainably to our 2% goal, and keeping longer-term inflation expectations well anchored. Our success in delivering on these goals matters to all Americans. We at the Fed will continue to do our jobs with objectivity, integrity, and a deep commitment to serve the American people. Thank you. I look forward to your questions.

So let me start with I don't respond to comments by other officials whoever they may be. It's just not appropriate to do that. I will tell you why I attended. I would say that that case is perhaps the most important legal case in the Fed's 113-year history. And I, as I thought about it, I thought it might be hard to explain why I didn't attend. In addition, Paul Volcker went to a Supreme Court case famously in I guess 1985 or so. So, it's precedented and I thought it was an appropriate thing and I did it.

So yeah, really two questions. One is we're getting through the distortions in the data from the shutdown, however big they were in November, they're smaller in December. So we're getting to a place where they're no longer material. They're still there, but it's a tweak here and there. The reason why we changed the statement, let me pull it out, was simply we used to say that judges that downside risks to employment rose in recent months. So we saw data coming in which suggests some signs of stabilization. I wouldn't go too far with that but some signs of stabilization. There also some signs of continued cooling and so we thought that was no longer an accurate description of the data. In addition, the outlook for economic activity has improved, clearly improved since the last meeting, and that should matter for labor demand and for employment over time. So, for those two reasons, we thought we would take that language out of the statement.

So, today I'm simply going to refer you to the statement that I made on January 11. I'm not going to expand on it or repeat it. So, I'm just not going to this is really about the press conference and the economy and what we did today, but and some ancillary areas, but I'm not going to be getting into that.

I have nothing for you on that today.

No. And I really once again have nothing for you on that today either.

Again, I don't want to get into that. There's a time and place for these questions and not something I'm going to be getting into today. Thank you.

So, Claire, as you probably know, we don't comment on the dollar really. The administration, especially the Treasury Department, has the job of oversight over the currency and exchange rates and all that. We don't comment on that. It's not our role. So I have nothing for you.

Yeah, I just don't you know we don't talk about the dollar. We don't talk about what moves it around. It's just not appropriate for us to do so really. The Treasury Department has that. It's their role, their bailiwick and we stay off it. We do monetary policy and some other things but we don't comment on the dollar. Sorry.