"Fed leaders anticipate more economic growth in 2026 and stable unemployment levels, but are somewhat concerned about slowing labor demand and participation. Lower rates could help juice hiring, Powell said. In terms of AI, the Fed chair said chatbots are not yet replacing jobs - even as Corporate America sees shrinking while collar roles. "It's part of the story, but it's not a big part of the story yet," he said."
"The figure remains slightly above the Fed's 2% goal, though data is limited due to the government shutdown. With lower rates, there's a risk consumer prices will rise too. At the same time, Powell said consumer spending has been strong and the main driver of inflation right now is tariff policy, not broad economic weakness. It was a hawkish rate cut overall, but markets rallied sharply anyway."
"The S&P 500 edged up to a near-record close and the Dow jump almost 500 points, adding to gains as Powell's press conference got going. A few things came out of the meeting that boosted investors' bullishness. The Fed's purchases of short-dated bonds should help keep a lid on yields and boost the appeal of equities. Powell indicated that a rate hike isn't the base case in the foreseeable future."
The Federal Reserve cut its benchmark interest rate by 25 basis points, marking the third cut this year and prompting the most dissent among officials since 2019. Fed leaders expect more economic growth in 2026 and steady unemployment but express concern about slowing labor demand and participation; lower rates could encourage hiring. Inflation remains slightly above the 2% goal, with limited data from a government shutdown and tariff policy highlighted as a current driver. Markets rallied despite a hawkish tone, with equity gains supported by short-dated bond purchases and indications that another rate hike is not the base case.
Read at Business Insider
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