Here is the main summary of the speech given by Federal Reserve Chair Jerome Powell today, September 23, 2025. Powell stated that the U.S. economy is in a "challenging situation," where the job market is slowing down while inflation is still somewhat elevated.
Key Points:
Caution on Interest Rates: After cutting interest rates last week, Powell signaled that future additional cuts would be made slowly and cautiously. He said that if rates were cut "too aggressively," there would be a risk of inflation getting out of control. However, if interest rates are kept high for too long, it could unnecessarily weaken the labor market. This move by the Fed is being seen as part of "risk management."
State of the Economy: According to Powell, the pace of economic growth has "moderated." Job growth has slowed, and a risk of rising unemployment has emerged. Consumer and business sentiment also remains weak.
Inflation: Although inflation has fallen from its 2022 peak, it remains above the Fed's 2% target. Recent data shows it at 2.7%. Powell expressed confidence that the price increases caused by tariffs would be short-lived and not have a long-term impact, but he acknowledged the risk of rising inflation in the short term.
Labor Market: There has been a decline in both the demand for and supply of workers in the labor market, which Powell described as an "unusual and challenging development." The Fed is closely monitoring the condition of the labor market.
Overall: Powell's speech signaled that the Federal Reserve is very cautious amid the current economic uncertainty and that future decisions will be data-dependent. They are seeking to strike a balance between inflation and employment.
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