Powell Discusses Feds' Approach To 'New Challenges' From Tariffs, Immigration Policy For Economy

Forbes Breaking News

Federal Reserve Chair Jerome Powell spoke about the impact of tariffs on monetary policy during his remarks in Jackson Hole, Wyoming on Friday Morning.

Transcript

00:01This year, the economy has faced new challenges.

00:04Significantly higher tariffs across our trading partners are remaking the global trading system.

00:09Tighter immigration policy has led to an abrupt slowdown in labor force growth.

00:14Over the longer run, changes in tax, spending and regulatory policies

00:19may also have important implications for economic growth and productivity.

00:24There is significant uncertainty about where all of these policies will eventually settle

00:29and what their lasting effects on the economy will be.

00:36Indeed, labor force growth has slowed considerably this year with the sharp falloff in immigration,

00:41and the labor force participation rate has edged down in recent months.

00:47Overall, while the labor market appears to be in balance,

00:50it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers.

00:57This unusual situation suggests that downside risks to employment are rising.

01:02And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.

01:09Higher tariffs have begun to push up prices in some categories of goods.

01:14Monetary policy is not on a preset course.

01:17FOMC members will make these decisions based solely on their assessment of the data

01:23and its implications for the economic outlook and the balance of risks.

01:27We will never deviate from that approach.

01:30We will never do so quickly.

01:31We are ready to move-time to get rid of the data.

01:33We can be on the left of the data,

01:37and just add to the data obviously.

01:39We will need to push increase increase in some categories now.

01:40We are starting to push up our rhythmic outlook.

01:42On the left of the language that will go up,

01:44we will probably move on a little bit more.

01:46We will want to push forward.

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