Economists Look Ahead to 2025 For Neutral Rate

Here's what economists had to say in the wake of the Federal Reserve's meeting and Chair Jerome Powell's press conference.

If the Economy Is So Good, Why Do Americans Feel So Bad?

Fed Chair Powell acknowledged the disconnect between the statistics—which show the economy running smoothly—and the widespread dissatisfaction with the public on 🔜the state of the economy in the wake of the burst of inflation that roiled household budg🌳ets after the pandemic.

“We know we say the economy is performing well, and it is, but we also know tꦿhat people are still feeling the effects of high prices,” he said. “The world went through a global inflation shock, and inflation wen༒t up everywhere. And it stays with you because the price level doesn’t come back down.”

The Fed, which is charged with managing inflatꦅion, aims to keep prices increasing at a stable 2% rate rather than generally falling. Sustai🐎ned deflation usually only occurs during times of severe economic distress, such as the Great Depression.

Although wage increases have more or less kept up with the price increas🎶es, it may be a while before the new price levels feel normal again to most household budgets, Powell said.

“It takes some years of real wage gains for people to feel better, and that’s what we’re trying to create,” he said. “Inflation has come way down. The ec🦩onomy is still strong here; wages are moving up but at a sustainable level. I think what needs to happen is happening, and for the most part, has happened. But it’ll be some time before people regain their confidence and feel that.”

澳洲幸运5开奖号码历史查询: -Diccon Hyatt

Will Powell Step Down If Trump Asks?

Trump appointed Powell to his chair during his first term in office but often publicly criticized him an𒁏d urged him to lower interest rates.

During the campaign, members of Trump's inner circle suggested he could try to bring the Federal Reserve, with its crucial role in running the economy, more under the president's control.

Powell was appointed to a second term by President Joe Biden and his current four-year term in his post continues through 2026. When a reporter asked Powell would leave his post if Trump asked him to, he replied with his briefest answer of the press conference: "No."

-Diccon Hyatt

Powell: Election Will Have No Impacts in the Short Term

Chair Powell said that the Federal Reserve doesn't anticipate Donald Trump's presidential election win will have short-term impacts on the committee's plans.

However, it could have longဣ-term effects depending on the policies Trump implements once he takes office, Powell said.

"We don't know what the timing and substance of any policy changes will be," Powell said. "We, therefore, don't know what the effects on the economy would be, specifically, whether and to what extent those policies would matter for the achievement of our goal variables—maximum employment and price stability."

Fed Chair Jerome Powell Says The Federal Reserve is Confident in a Soft Landing

Federal Reserve Chair Jerome Powell said the committee is still confident they can bring the economy in for a 澳洲幸运5开奖号码历史查询:soft landing.

"We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained with inflation moving sustainably down to 2%," Powell said.

The Federal Reserve Emphasizes the Labor Market Concerns in Its Statement

This month, the Federal Reserve included a new addition to its statement on the state of the𒊎 economy, emphasizing that officials are keeping a close eye on the labor market.

"Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low," the statement said.

Members pay a lot of attention to the committee's statement, crafting it to send a direct message to market participants. The statement is often painstakingly revised, with members adding and removing sentences from past statements.

Federal Reserve Cuts Its Influential Interest Rate By A Quarter-Point

In a widely expected move, the Federal Reserve trimmed its benchmark interest rate by a quarter-point on Thursday.

In a unanimous vote, the Fed's policy committee lowered its 澳洲幸运5开奖号码历史查询:fed funds rate to a range of 4.5%-4.75%, its lowest level since March 2023. The cut is designed to reverberate th🐷roughout the economy, lowering borrowing costs on credit cards, autoꦦ loans and other debt.

Read more about the decision here.

Markets Await the Federal Reserve Interest Rate Decision

The U.S. stock market stuttered slightly in the early afternoon as investors await the Federal Reserve's interest rate decision. 

The S&P 500 and Nasdaq Composite were up 0.6% and 1.2% respectively, down slightly from their earlier highs. The Do꧟w Jones Industrial Average was down ꧑0.7% from its previous close.

Following Donald Trump's win in the presidential election, the major indexes turned in their 澳洲幸运5开奖号码历史查询:best one-day performances since 2022 on Wednesday.

Follow along with the stock market's reaction to the Fed's decision here.

What Happened At The Last FOMC Meeting?

I൲f the Fed cuts its benchmark rate today, it will be only the second time since 2020.

In its most recent meeting in September, the committee cut the 澳洲幸运5开奖号码历史查询:fed funds rate by 50 澳洲幸运5开奖号码历史查询:basis points for the first time in four years. The move 澳洲幸运5开奖号码历史查询:kicked off whꦐat is expected to be a campaign of rate cuts designed to lower the cost of bor🍸rowing and stimulate the economy.

The move surprised some Fed wa꧙tchers and not every policymaker was on board with the decision. Fed Governor Michelle Bowman voted for a ꧟smaller cut of 25 basis points.

Read more about the Federal Reserve's last meeting here.

What to Expect From the Federal Reserve's November Meeting

Investors and economists are holding Federal Res𒀰erve officials at their word for their November meeting.

In speeches ahead of a "blackout period" beginning Oct. 26, Fed officials indicated that 澳洲幸运5开奖号码历史查询:gradual interest rate cuts over the next few months were in order, and none of the major economic data released since then have been surprising enough to♌ shake up that perception, economists say.

That's left economists and traders confident that the Federal Reserve will lower its benchmark federal funds rate by a quarter-point when it makes a decision on Thursday.

Read more about what to expect from today's meeting here.