Jerome Powell, president of the FED: US economy is solid

The president of the Federal Reserve, Jerome Powell, discussed the US economic perspectives at the Chicago Economic Club.

Outstanding comments

• Well positioned to expect greater clarity before considering any change in the policy position.
• The US economy is ‘solid’ despite the growing uncertainty and downward risks.
• In or close to the maximum employment, inflation a little above the 2%target has dropped considerably.
• Growth was probably decelerated in the first quarter of 2025 with respect to the solid rhythm last year.
• Strong imports of the first quarter will weigh on the growth of GDP.
• Acute drop in business and household feelings and high uncertainty, reflecting concerns about commercial policy.
• The labor market is solid, generally balanced, not contributing to inflation.
• PCE prices probably increased 2.3% in 12 months until March, the underlying PCE is estimated by 2.6%.
• Administration policies are still evolving, the effects remain highly uncertain.
• Until now, tariffs greater than expected probably mean greater inflation and slower growth.
• The inflationary effects of tariffs could be more persistent, ultimately depends on inflation expectations.
• Our obligation is to keep long -term inflation expectations anchored.
• We could find ourselves on the challenging stage in which the objectives of the dual mandate are in tension.
• If that happens, we would consider how far the economy of each objective is and the potential time horizons so that these holes close.