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US Federal Reserve Chairman's Conference: Changes in Economic Trend Due to Trump's Policies
The US Federal Reserve announced its decision to keep interest rates unchanged at 4.5% and revealed a dot plot showing that its forecast for interest rates by the end of 2025 has changed from 4.4% to 3.9%, meaning it now expects three rate cuts by the end of the year instead of maintaining them at the current level.
Jerome Powell's Highlights:
The US economy is strong and the labor market is resilient, despite continued high levels of inflation.
The Fed has decided to accelerate the reduction of the federal budget.
Recent data indicates a slowdown in consumer spending.
A state of uncertainty is affecting future economic forecasts.
The labor market is not a primary cause of current inflationary pressures.
Inflationary expectations have recently risen due to the impact of tariffs.
The Fed expects inflation to stabilize at 2% over the long term, the Fed's stated target.
Significant political changes under the new administration will have an impact on US fiscal policy.
Current political uncertainty is significantly impacting the economic outlook.
I place a strong emphasis on separating fiscal policy from the media hype surrounding it.
If the economy continues to strengthen, we can maintain a tight monetary policy for a longer period.
He added, "If we see a slowdown in the labor market, we will take the necessary fiscal measures and ease monetary policy as required."
He also emphasized, "We have seen some signs of tightness in the financial markets, but indicators show that reserves in the financial markets remain adequate."
