🚨 FED UPDATE: Powell Signals Stability Tools, Labor Market Risks & Inflation Drivers 🚨
📉 Powell: Cooling Labor Market Justifies Today’s Rate Cut
Fed Chair Jerome Powell says the decision to cut rates was driven by a gradual softening in the U.S. labor market, reinforcing the need for policy easing.
📊 Minimal Rise in Unemployment Expected
Powell projects the unemployment rate will rise only 0.1–0.2%, signaling a mild adjustment rather than a sharp downturn.
👷 Job Loss Forecast: -20,000 Per Month
The Fed anticipates monthly employment declines of around 20,000 jobs, reflecting cooling—not collapsing—labor conditions.
💼 Bond Purchase Program Ending April 15
Powell confirmed the Fed’s large-scale bond purchases will conclude by April 15, aligning with U.S. Tax Day and marking a key milestone in policy normalization.
Federal Reserve Chair Jerome Powell delivered several key messages today, giving markets a clearer picture of the central bank’s outlook:
🔹 Standing Repo Operations Are Essential
Powell emphasized that standing repo facilities remain a crucial tool for keeping the federal funds rate within its target range and ensuring smooth market liquidity.
🔹 Unemployment Uncertainty Rising
Fresh Fed projections show most participants now see higher uncertainty around the unemployment rate, with risks increasingly tilted to the upside. This reflects a cooling labor market but not a sharp downturn.
🔹 No Inflation Concerns From Rates
Powell noted that current interest rate levels are not contributing to inflation pressures, calming fears of policy-driven price instability.
🔹 Tariffs Identified as Main Inflation Driver
In a key highlight, Powell pointed to tariffs as the primary reason inflation has risen beyond earlier expectations — not domestic demand or interest rates.
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