Inflation Has Eased, but Remains Elevated, Powell Says

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00:00In support of our goals, in light of the balance of risks to employment and inflation,

00:05today the Federal Open Market Committee decided to lower our policy interest rate

00:09by a quarter percentage point. As a separate matter, we also decided to initiate purchases

00:15of shorter-term Treasury securities solely for the purpose of maintaining an ample supply of

00:20reserves over time, thus supporting effective control of our policy rate. Inflation has eased

00:26significantly from its highs in mid-2022, but remains somewhat elevated relative to our 2%

00:33longer-run goal. Very little data on inflation have been released since our meeting in October.

00:40Total PCE prices rose 2.8% over the 12 months ending in September, and excluding the volatile

00:47food and energy categories, core PCE prices also rose 2.8%. These readings are higher than earlier

00:56in the year as inflation for goods has picked up, reflecting the effects of tariffs.

01:01In contrast, disinflation appears to be continuing for services. Near-term measures of inflation

01:07expectations have declined from their peaks earlier in the year, as reflected in both market

01:12and survey-based measures. Most measures of longer-term expectations remain consistent with

01:18our 2% inflation goal.