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#Fed Chair #JeromePowell on #US #economy & #inflation amid #Trump #tariffs uncertainty
US #stocks added to losses as Powell was speaking.
"The tariffs are larger than forecasters had expected, certainly larger than we expected, even in our upside case," he said.
He also said the Fed is still uncertain what Trump’s new trade policies will ultimately be.
The effects of policies now will likely move the Fed away from its goals.
#JeromePowell also said #Immigration has been a big reason growth has been so strong over the last couple of years.
The growth in the supply of #workers has stagnated, but so has demand for workers, as companies make cutbacks which is why unemployment is relatively stable.
Government layoffs are not yet measured enough to know effect on the #economy
#Car company #SupplyChains are likely to be disrupted for years.
#JeromePowell on federal #funding cuts:
With cutbacks in federal funding for #science, the #Fed is hearing of significant #employment impacts.
Cutbacks to #university & #research funding are causing significant impacts in some cities; it could have longer-term effects on productivity.
#JeromePowell said that #trade policies pursued by the Trump admin will create challenges for the central bank to meet its #job & #inflation mandates this year.
The new trade policies represent significant change.
"The effects of that are likely to move us away from our goals, so #unemployment is likely to go up as the #economy slows in all likelihood, & inflation is likely to go up as #tariffs find their way" into the economy.
He added this will likely play out over the course of the year.
#JeromePowell says #Fed could have to make a difficult decision.
The Fed's 2 goals are not yet in tension, but the potential is leading to simultaneous higher #unemployment & higher #inflation.
The tension between employment & inflation goals would be a difficult position for the Fed to lower rates.
#US #economy #Trump #policy #JeromePowell #Fed #US #inflation #tariffs
#JeromePowell said #markets are processing the #policy changes, but they are functioning.
"What I think is going on in markets is markets are processing what's going on, markets are struggling with a lot of #uncertainty & that means #volatility.”
He also said that volatility is likely to continue given the high uncertainty.
The #Federal is ready to provide #dollar liquidity through its swap lines w/other central banks as needed, #JeromePowell said.
"We want to make sure that dollars are available.”
"The reason we do it is it's really good for US consumers, so we'll do that just as part of the dollar being a reserve currency.”
Reserves are still abundant
Not close to where Fed would stop balance sheet runoff
The slower the Fed goes, the smaller the balance sheet can get w/o disruption
Federal debt is on an unsustainable path, though not at an unsustainable level.
Running large deficits w/full employment is a situation the country has to address
Domestic discretionary spending is small & declining as a share of federal spending; that is not the problem
So much of the dialogue from politicians is about discretionary spending, which is not the issue.
#US #economy #Trump #policy #Fed #US #inflation #tariffs #recession
#JeromePowell on #cryptocurrency
#Crypto is becoming more mainstream, & a #legal framework for #stablecoins is a good idea
Stablecoins could have wide appeal, & *should* have #ConsumerProtections!
There will be some loosening of rules to allow innovation, but it needs to be done in ways that does not make banks less safe & sound
#US #economy #Trump #policy #Fed #US #law #regulation #currency #inflation #tariffs #recession
#AI likely to bring dramatic change, #JeromePowell says
Powell also said:
AI is more than a better version of Google, and it's like a better version of a person [at least he doesn’t confuse it with a steak sauce]
AI is one of the two or three things likely to bring dramatic change to the economy
It's hard to know how it will shakeout
#US #economy #Trump #policy #Fed #US #law #regulation #currency #inflation #tariffs #recession
#JeromePowell said #Fed independence is a matter of #law! [tyvm]
His remarks on Fed independence drew a round of audience applause in Chicago.
He said:
We are protected in the law
Fed independence has broad support across political parties
I don't think the case before #SCOTUS on independent agencies will apply to the Fed
Fed is not going to be influenced by political pressure 
#US #economy #Trump #policy #US #law #regulation #currency #inflation #tariffs #recession
The 3 major #US #stock indexes extended declines in afternoon trading on Wednesday while #JeromePowell spoke.
"Powell’s saying what the market has been fearing all along. And it’s coming from the Fed chief, confirming all these things," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
#US #economy #Trump #policy #Fed #US #law #regulation #currency #inflation #tariffs #recession
@Nonilex@masto.ai "AI is one of the two or three things likely to bring dramatic change to the economy"
Yeah, and setting fire to your house while everyone is in bed asleep brings dramatic change to your household.