Thanks for joining us. Here are five key takeaways from Federal Reserve Chair Jerome Powell’s press conference Thursday:
- The Fed chief was peppered with questions about how he and other officials may be adjusting their economic forecasts in response to Donald Trump’s reelection. Powell said the election outcome would not affect what policymakers do in the near term because it is too early to know what actions the Trump administration will take. He said officials do not adjust their forecasts until after a policy has been enacted or a law has been passed.
- Powell was direct and said he would not resign if Trump pressured him to leave, ending speculation that he might step down before his term is over. The Fed chair said it is “not permitted under the law” for the president to fire or demote him. Powell’s term ends in May 2026.
- Overall, Powell worked hard not to offer forward guidance on where rates could go from here, keeping his options open for the December meeting and beyond. He stressed that officials can take their time to lower rates because the economy is strong. He also said that policy is still restrictive, even after today’s cut, and that policymakers are in the process of bringing rates to neutral levels.
- As for when the Fed would adjust the pace of its rate cuts, Powell said officials could move more quickly if the labor market deteriorates and could slow cuts down as they approach neutral. But he said policymakers haven’t made any decisions about that yet.
- Market reaction was limited, with many investors continuing to focus on the implications of the election. Stocks sustained their advance, with the S&P 500 heading for another record close. Treasury yields dipped after climbing the day before, with two-year rates down about 6 basis points, at 4.20%. The dollar was down 0.8%, according to the Bloomberg Dollar Spot Index, giving up some of Wednesday’s surge.