The Fed Chairman just finished his press conference, here are my initial thoughts:

Three members disagreed on the decision to cut interest rates this time. Austan Goolsbee (President of the Chicago Fed) and Jeffrey Schmid (President of the Kansas Fed) opposed the cut. Governor Stephen Miran wanted a larger cut of 0.5%. The remaining nine members supported a 0.25% cut.

Fed Chairman Jerome Powell said interest rates could remain unchanged, decrease slightly, or decrease more sharply next year, depending on the data. He emphasized, “I don’t think raising interest rates is anyone’s baseline scenario.” The Fed has also not yet made a decision for its January meeting.

Powell further stressed that there is no path entirely without risk. Both the labor market and inflation need to be closely monitored. He said recent employment figures may have been “inflated” by about 60,000 per month. At this point, he believes the US is in the high end of its neutral interest rate range, the rate the Fed considers to be balanced between supporting the labor market and controlling inflation.

Regarding AI, Powell has yet to offer a clear stance. He only stated that AI could take away jobs but could also increase output, corporate profits, and impact GDP.

On the issue of tariffs, Powell said the full impact might become clearer in the first quarter of 2026. He doesn't think it will have a major impact. Tariffs might cause inflation to rise slightly, but this would only be a one-time effect; after that, inflation would stabilize and continue its downward trend. Regarding the tariff case at the Supreme Court, he declined to comment because the Fed does not offer political opinions.