Chair powell good afternoon. My colleagues and i are committed to bringing it down to 2 . Price stability is the responsibility of the federal reserve. Without price stability, the economy does not work for anyone. Without price stability we will not achieve a sustained period of strong Labor Conditions that benefit all. Today, the fmo c raised by three quarters of a percentage point. We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 . In addition, we are continuing the process of significantly reducing the size of our balance sheet. I will have more to say about todays Monetary Policy actions after briefly reviewing economic developments. The u. S. Economy has slowed from the historically high growth rates of 2021, which reflected the open of the economy following the pandemic. Recent indicators point to modest growth of spending and production. Growth and Consumer Spending has slowed from last years rapid pace, reflecting lower real disposable income. Activity in the housing sector has weakened significantly, reflecting higher mortgage rates. Higher Interest Rates and slower output growth appeared to be weighing on business investment, while weaker Economic Growth abroad is restraining exports. Since june, participants have marked down their projections for Economic Activity. Despite the slow down and growth the labor market has remained tight, with the Unemployment Rate near 50 year low, Job Vacancies in their historical highs and wage growth elevated. Job gains have been robust, with employment rising by an average of 3078 jobs per month. The labor market continues to be out of balance with demand for workers substantially exceeding the supply of available workers. The Labor Force Participation rate to showed an uptick in august, but has not changed since the beginning of the year. The median projection in the sep rises to 4. 4 at the end of next year. Over the next three years, the meeting Unemployment Rate runs above the median estimate of its longer run normal level. Inflation remains well above our 2 goal. Over the 12 months ending july, total prices rose 6. 3 excluding the volatile food and energy categories. In august the 12 month change in consumer pricing index was 8. 3 . The change in the core pci was 6. 3 . Although gasoline prices have turned down in recent months, they remain well above your earlier levels, reflecting russias war against ukraine, which has boosted prices for energy and food. The median projection in the sep for total pce inflation is 5. 4 this year and falls to 2. 8 next year, 2. 3 in 2024, and 2 in 2025. Participants continue to see risks to inflation as weighted to the upside. Despite elevated inflation, longerterm Inflation Expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets. But that is not grounds for complacency. The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched. The feds Monetary Policy actions are guided by our mandate to promote maximum employment and stable prices for the american people. My colleagues and i are acutely aware that high inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher costs of essentials like food, housing, and transportation. We are highly attentive to the risks that high inflation poses to both sides of our mandate, and we are strongly committed to returning inflation to our 2 objective. At todays meeting the committee raised the target range for the federal funds rate by 3. 25 percentage point, bringing the target range to 3 to 3. 25 . And we are continuing the process of significantly reducing the size of our balance sheet, which plays an Important Role in firming the stance of Monetary Policy. Over coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2 . We anticipate that ongoing increases in the target range for the federal funds rate will be appropriate; the pace of those increases will continue to depend on the incoming data and the evolving outlook for the economy. With todays action we have raised Interest Rates by 3 three Percentage Points this year. At some point, as the stance of Monetary Policy tightens further, it will become appropriate to slow the pace of increases, while we assess how our cumulative policy adjustments are affecting the economy. We will continue to make our decisions meeting by meeting and communicate our thinking as clearly as possible. Restoring price stability will likely require maintaining a restrictive policy stands for some time. The historical record cautions strongly against prematurely listening policy. As shown in the sep, the median projection for the appropriate level of the federal funds rate is 4. 4 at the end of this year, 1 higher than projected in the june. Median projection rises to 4. 6 at the end of next year and declines to 2. 9 by the end of 2025, still above the median estimate of its longerrun value. Of course, these projections do not represent a Committee Decision or plan, and no one knows with any certainty where the economy will be a year or more from now. We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply. Our overarching focus is using our tools to bring inflation back down to our 2 goal and to keep longerterm Inflation Expectations well anchored. Reducing inflation is likely to require a sustained period of belowtrend growth, and there will very likely be some softening of labor Market Conditions. Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run. We will keep at it until we are confident the job is done. To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We at the fed will do everything we can to achieve our maximum employment and price stability goals. Thank you, and i look forward to your questions. Thank you for the questions. I wonder if you could give us a little detail on how you will know when to slow down these rate increases and how you will know when to stop . Chair powell so, i will answer your question directly. I want to start here today by saying, my main message has not changed at all, since jackson hole. The fomc is resolved to bring inflation down to 2 . We will keep at it until the job is done. So, the way we are thinking about this is the overarching focus of the committee is getting inflation back down to 2 . So congress that, think we will need to do two things in particular to achieve a period of growth below trend and also some softening in labor markets to foster a better balance between demand and supply. So, on the first committees forecast, and most outside forecasters show growth this year next year. On the second, so far there is modest evidence that the labor market is cooling off. Job openings are down a bit, as you know, quits are at their alltime highs. There are some signs that wage measures may be flattening, but not moving up. Payroll gains have moderated but not by much. In light of the highend inflation we are seeing, we will need to see, in light of what we just said, we will need to bring our funds rate to a restrictive level and to keep it there for some time. So, what we will be looking at, is a question . We will be looking at a few things. First we want to see growth below trend. We want to see movements in the labor market showing a return to better balance between supply and demand. Ultimately, we want to see clear evidence that inflation is moving back down to 2 . So, that is what we will be looking for. In terms of reducing rates, we would want to be very confident that inflation is moving back down to 2 . Before we would consider that. Thank you mr. Chairman. Can you talk about how you factor in the variable lags on inflation and the extent to which the outlook for rates should be seen as linear in the sense that you keep raising rates or can you envision a time where there is a pause to look at what has been wrong in the economy, from the increases . Chair powell sure. So, of course, Monetary Policy does famously work with along invariable lags. The way i think about it is our policy decisions affect financial conditions immediately. Financial conditions have been affected before we announce our decisions. Then changes in financial conditions begin to affect, Economic Activity quickly, within a few months. Its likely to take some time to see the full effects of changing financial conditions on inflation. We are very much mindful for that. That is why i noted in my opening remarks, at some point, as the stance of policy tightens, it will be appropriate to slow the rate hikes while we assess how our cumulative policy adjustments are affecting the economy. That is how we think about that. Your second question was . Is our appointed time you can see pausing as linear . I should know better than to talk without my microphone. Is it linear, you keep raising rates or is there a pause you can envision where you figure out what has happened to the economy and time to catch up in the real economy, the rate increases . Chair powell i think it is very hard to say with precise certainty the way this is going to unfold. As i mentioned, what we think we need to do, and should do is move our policy rate to a restrictive level that is restrictive enough to bring inflation down to 2 , where we have confidence of that. What you see in the sep numbers, people as of today, as of this meeting, as of the kind of levels that will be appropriate. Those will evolve over time. I think we will just have to see how that goes. Theres a possibility that we would go to a certain level, that were confident in and stay there for a time. But, we not at that level. Clearly today, we are just weve just moved into the very lowest level of what might be restrictive and in my view, and the view of the committee, theres a ways to go. Hi, sir powell, thank you for taking our questions. The Unemployment Rate is rising to forward 4 next year. Historically, the kind of rising rate would bring a recession with it. Should we interpret that to mean no soft landing . Is that right is necessary to get inflation down . Chair powell so, youre right. In the sep, what i would characterize as a moderate increase in the Unemployment Rate, given the decline in inflation, wise that . Why is that . That is what we generally expect because we see the Current Situation as outside of historical experience in a number of ways. I will mention a couple of those. First, job openings are incredibly high, relative to the number of people looking for work. Its possible, i will say that job openings could come down significantly. They need to, without as much of an increase in unemployment, as has happened in earlier historical episodes. Thats one thing. In the cycle, longer run Inflation Expectations have generally been fairly well anchored. I have said, there is no basis for complacency there. But to the extent of that continuing to be the case that should help restore price stability. The third thing i would point to is part of this inflation is caused by the series of supply shocks that we have had a beginning with the pandemic, and with the reopening of the economy in more recently amplified attitude by russias invasion of ukraine, have all contributed to the sharp increase in inflation. These are the kinds of events not seen in prior Business Cycles. And in principle if those things start to get better, we do see some evidence of it beginnings of it beginning to, for example Commodity Prices look like they may have peaked for now, supply chain disruptions are resolving, those developments, if sustained, can help ease pressure of inflation. How much these factors will turn out to really matter in the sequence of events, it remains to be seen. We have always understood that restoring price stability while achieving a relatively modest decline, or increase in unemployment and a soft landing would be challenging. And we do not know. No one knows whether this process will lead to a recession or how significant the recession would be. That is going to depend on how quickly wage and Price Inflation pressures come down, whether expectations remain anchored and whether, also, do we get more labor supply, which would help as well. The chances of a soft landing are likely to diminish to the extent that policy needs to be more strict of. Or restrictive for longer. Nonetheless. We are committed to getting inflation it down to 2 . We think a failure to restore price stability would mean a greater pain later on. Our vacancy still at the top of your list in terms of understanding the labor market . Chair powell yes. Vacancies are still almost two to one ratio to unemployed people. That and quits are really good ways to see how tight the labor market is and how different it is from other cycles, where, generally the Unemployment Rate is the single best indicator. Those things added value in terms of understanding where the labor market is. You said not too long ago, in describing the policy destination there still a way to go. I imagine you have to have some idea about how you are thinking about your destination, whether it is a stopping point or a pausing point, i was wondering if you could discuss how you are thinking about as the data comes in, where the destination is, how it is moving up if inflation doesnt perform as you expect. Do you want to have a policy rate above the underlying inflation rate to for example . Do you have an estimate for where you think the underlying inflation rate might be in the economy now . Chair powell so, again, we believe that we need to raise our policy stance overall to a level that is restrictive. By that i mean is putting meaningful downward pressure on inflation, that is what we need to see in the stance of policy. We know that there are long invariable as it relates to inflation and inflation. You look at broader conditions. You look at where rates are real and nominal in some cases. You look at credit spreads, financial conditions, indexes. You see this this is something we talked about in the meeting today and in all of our meetings. You see this in the committee forecast. You want to be at a place where real rates are positive across yield curve. That would be the case if you look at the numbers we are writing down, and think about measure those against some sort of forwardlooking assessment of inflation, Inflation Expectations. You would see at that time positive real rates across the yield curve. That is an important consideration. Hi. Howard with reuters. Thanks the opportunity. I want to be clear. You say it is meeting by meeting, but it looks like were going 75, 50, 25. Is 75 months months baseline is 75 months baseline . Chair powell the decision we made today was to raise the rates by any five. By 75. The median for the year and suggestion of 125 basis points in rate increases. Theres another fairly large group that saw 100 basis points, addition to where we are today. That would be 25 basis points left. We are going to make the decision at the meeting. We did make that decision today. We did vote on that. We are committed to getting to a restrictive level for the federal funds rate. Getting there quickly. That is what we are thinking about. Is a followup. Im wondering about the Risk Management considerations there. Given that there are discussions of overdoing it, what is the incentive to continue frontloading . Is it lack of progress on inflation seen in the cpr reports or is it motivation to get as much done while the job market is still strong . Chair powell what we have seen is inflation our expectation has been we would begin to see inflation come down, largely because of the supplyside healing. By now we wouldve thought we wouldve seen that. We have not. We have seen supplyside healing, but inflation is not come down. If you look at core pce inflation, which is a good measure of where inflation is running now. If you look at it on a 3, 6, 12 month trailing basis, you will see that inflation is at 4. 8 , 4. 5 , and 4. 8 . Thats a pretty good summary of where we are with inflation. That is not where we expected or wanted to be. What that tells us is, we need to continue. We can, keep doing this, doing another large increase, as we approach the level we think we need to get to. We are still discovering what the level is. People are writing that down in their sep, where they think policy needs to be. That is how we are thinking about it. Thank you. How should we interpret the fact that core inflation is not forecasted in the sep to be back to target in 2025 . The plot projects cuts as early as 2024. Does that mean there is a level 11 of inflation of inflation above the 2 target, that the fed is willing to tolerate . Chair powell i guess core is at 2. 1 led to an attorney five in 2025. Headline is at 2. 0. That is petty close. We write down our forecast and we figure out what the meeting is and we publish it. Its not i would say if the economy follow this path it would be a good outcome. You are right, it is a tent higher than 2 . A quick followup. The concern is underlying inflation, its becoming more entrenched perhaps each month, why forgo the more aggressive 100 basis point increase today, does that risk . Chair powell as we said at the last press conference and in between that one and this one, we said we would make the decision based on the data coming in. We have a surprisingly low reading in july. In a surprising and a high reading in august. You never want to overreact too much to anyone data point. If you look at them together, as i mentioned, if you really look at this years inflation, 3, 6, 12 month trailing you see inflation is running too high. 4. 5 or above. You dont need to know much more than that. If thats the one thing you know, you know this committee is committed to getting to a meaningfully restrictive stance of policy and staying there until we feel confident that inflation is coming down. That is how we think about it. Hi. I wanted to ask about the balance sheet. You all have left open the possibility that you might sell mortgagebacked securities, but we have seen significant slowing in the Housing Market. Mortgage rates have gone up. Im wondering, weather conditions there might affect your plans for how quickly you have the runup . Chair powell what we said was we would consider that once runoff is underway. It is not something were considering now or i expect to be considering in the near term. Its something we will turn to. But that time to turn to it has not come. Will conditions in the Housing Market affect that decision . Chair powell a number of things might affect that decision. The main thing is we are not considering that decision, and i dont expect we will anytime soon. Thanks. A number of commentators have come to the view, including over the world bank, sing simultaneous global timing over the world creates a risk of a global recession to bring inflation down, howdy see that risk, how do you think how do you see that risk, is there much risk of owed overdoing it on a global level . Chair powell my colleagues and i just got back from one of our frequent trips to switzerland to meet with other Senior Central Bank officials from around the world. We are in pretty regular contact. We exchange we serve a domestic mandate, the dual mandate, but we regularly discuss what we are seeing in terms of our own economy and international spillovers. Its an ongoing constant process. So, we are very aware of what is going on in other economies around the world and what that means for us and vice versa. Our the forecast that we put together, that our staff puts together, always take that, we always had to take that into account. Its not as if we dont think about the policy decisions, monetary and otherwise, the economic developments taking place in Major Economies that can have affects on the u. S. Economy. That is baked into our own forecast and understanding of the u. S. Economy, as best we can. It will not be perfect. I dont its hard to talk about collaboration in a world where people have Different Levels of Interest Rates. If you remember, their coordinated cuts and raises at various times, we are in different situations. But i will tell you, our contact is more or less ongoing. And its not coordination, but theres a lot of information sharing. We all are informed by what other important economies, important to the u. S. Are doing. Craig from bloomberg. You talked about how higher Interest Rates are affecting the economy. But weve also seen a resilient labor market with a durable consumption, strong corporate profits. I am wondering what your story is on the resilience of the economy. You and your colleagues said, we started tightening in march when we were talking about Interest Rates in the future. The treasury rates moved up. We should have had a lot of tightening, taking effect. Why is the economy in your view so resilient . Does it mean we might need a higher terminal rate . Chair powell youre right. The labor market has been very strong. But, the sectors of the economy that are most Interest Rate sensitive are showing the effects of our tightening. The obvious example is where you see declining activity of different kinds and Housing Price increases moving down. We are having an effect on intersensitive spending, i think through exchange rates. Where having an effect on exports and imports. So, all of that is happening. But, youre right. We have said this. This is a strong, robust economy. People have savings on their balance sheet, from the period when they couldnt spend, and where they were getting government transfers. There is a significant savings out there. Though not as much on the low income spectrum. Some savings out there to support growth. The states are very flushed with cash. There is a good reason to think this will continue to be a reasonably strong economy. The data sort of showing that growth is showing that growth is trending. We are forecasting growth below that and most forecasters are, but youre right, theres a possibility that growth can be stronger than that. And thats a good thing. The economy will be more resistant to a significant downturn. But, of course, we are focused on the thing i started with, which is getting inflation down to 2 . We cant fail to do that. Thats if we were to fail that, that would be the thing that is most painful for the people we serve. For now, that has to be our overarching focus. And you see that in the sep, in the levels of rates we will be moving to, reasonably quickly, assuming things turn out roughly in line with the sep. That is how we think about it. Thank you, mr. Chairman. In a world of euphemisms that we live here with below trend growth and modest increase in unemployment, im wondering if i could ask you a couple of direct questions. Do the odds now favor given where you are and where youre going with Interest Rates favor recession . 4. 4 unemployment is about 1. 3 million jobs. Is that acceptable job loss . Given that the data you look at his backward looking and the lags in your policy are forwardlooking and you dont know what they are, how will you know, or will you know if youve gone too far . Chair powell i dont know what the odds are. I think that there is a very light high likelihood, that we will have a period of what i mentioned as below trend growth, much lower growth. We are seeing that now. The median forecast this year for my colleagues and me was 0. 2 growth. That is very slow growth. Below trend next year the median was 1. 2 , well below. That is a slower low level of growth and it could give rise to increases of unemployment. That is something we needed to have. We need to have softer labor Market Conditions as well. We are never going to say that there are too many people working. But the real point is this, inflation, what we hear from people when we meet with them is they really are suffering from inflation. If we want to set ourselves up, really like the way to another period of very strong labor markets, weve got to get inflation behind us. I wish there was a painless way to do that. There is it. So what we need to do is get rates up to the point where we are putting meaningful downward pressure on inflation. That is what we are doing. We dont help, we certainly have not given up the idea that we can have a relatively modest increase in unemployment. Nonetheless, we need to complete this task. How will you know or will you know if youve gone too far . Chair powell its hard to hypothetically deal with that question. Our really tight focus continues to be ongoing rate increases, to get the policy right upper needs to be. As i said, you can look at this sep as todays estimate of where we think those rates will be. They will evolve over time. I wanted to follow up with what you mentioned about the labor market. You said it several times that to have labor market we want, we need price stability, you suggested maybe there is not a tradeoff in the long run. But in the short run, theres a lot of concern, as people are expected to hear about higher unemployment, as a result of these rate hikes. Can you explain what about high inflation now, you seem to suggest inflation will lead it to a weaker job market, can you spell that out a little more for the general public . Chair powell for starters, people are thing their wage increases enough by inflation. So, if your family is one where you spend most of your paycheck, every paycheck on gas, food, transportation, clothing, basics of life, and prices go up, the way theyve been going up, you are in trouble right away. You dont have a cushion. This is very painful for people at the lower end of the income and wealth spectrum. That is what we are hearing from people. Very much that inflation is really hurting. How do we get rid of inflation . As i mentioned, it would be nice if there was a way to just wish it away, but there is an. We have to get supply and demand back into alignment. The way we do that is by slowing the economy. Hopefully we do that by slowing the economy and we see, some softening in the labor Market Conditions. And we see a big contribution from supplyside improvements, but none of that is guaranteed. In any case, our job is to deliver price stability. Who can think of price stability as an asset that just delivers large benefits to society over a long period of time. We saw that for a long time. The u. S. Had 2 inflation, did move around much, that was beneficial to the public that we serve. We have to get back to that and keep it for another long period of time to pull back from the task of doing that, youre just postponing the record shows, if you postpone that, the delay is only likely to lead to more pain. So, i think we are moving to do what we need to do and do our jobs. And that is what you see us doing. Thank you for taking the question. You had said that americans had businesses need to feel economic pain as we go forward, how long from here should americans be prepared for that pain . Chair powell how long . It really depends on how long it takes for wages and more than that prices to come down for inflation to come down. What you see in our productions today projections today is inflation moves down significantly over the course of next year and mourned the next year after that. I think once you are on that path, thats a good thing. Things will start to feel better. They will feel lower inflation into the economy improving. If our projections are close to right, youll see that. The cost in employment, there meaningful, and certainly meaningful to the people who lose their jobs. Quite a lot. At the same time we would be sitting up the economy for on the long period this rewrite has been noted for long expansions, three of the four longest in measured history since we got inflation under control. And that is not an accident. When inflation is low and stable you can have these 9, 10, 11 year extensions, and you can see what we saw in 2018, 2019 and 2020, very low unemployment, the biggest wage gains going to people at the lowest end of the spectrum, the smallest racial gap since we started keeping track of that. We went to get back to that. But to get there we are going to have to get supply and demand back in alignment, and that is going to take tight Monetary Policy for a period of time. What is that economic pain in your mind . Is it god blesses, higher Interest Rates on credit cards . Chair powell it is all of those things. If higher Interest Rate slow growth and a higher interest market are all painful for the public we serve, but they are not as painful as failing to preserve price stability and having to come back and do it down the road again and doing it at a time when now people have come to expect hi inflation. If the concept of high inflation becomes interest in peoples economic taking in their decisions, then sort of getting back to price stability the cost of getting back to price stability only rises, so we went to avoid that. We went to act aggressively now and get the job done and keep at it until it is done. Nicole, cnn. Thank you, chairman l. Existing home sales have fallen for 70 one st, mortgage levels are at the highest levels since 2008 yet Housing Prices are still elevated. At the end of your june conference you talked about plans to reset the market. What do you think will it take to actually get there . Chair powell when i say reset i am not looking at a particular set of data or anything. What im saying is we have had a time of a redhot Housing Market all over the country where famously houses were selling to the first buyer at 10 above the ask before seeing the house, that kind of thing. There was a big imbalance between supply and demand, Housing Prices were going up at an unsustainable level. The deceleration in Housing Prices should help bring prices more in closely in line with rent and other housing fundamentals, and that is a good thing. For the longer term, what we need is for supply and demand to get better aligned. Housing prices go up at a reasonable level, a reasonable pace and people can afford houses again, so we and the Housing Market after go to correction to get back to that place. There are also longer run issues with the Housing Market as you know, it is difficult to find lots close enough to cities, so builders are having a difficult time getting zoning and lots and workers and materials. Im a Business Cycle standpoint from a Business Cycle standpoint, this digital correction should put the Housing Market back in better balance. [indiscernible] shelter made up a large part of this hot cpi report we saw. Do you think we will see that come down in the coming months or do you think there is this imbalance that needs to be addressed . Chair powell i think shelter inflation will remain high for some time. We are looking for her come down but we are not clear when that will happen. It may take some time. Hope for the best, plan for the worst. I think on shelter inflation you have to assume it is going to remain high for a while. [indiscernible] jean young with market news. You have talked about the need to get real rates into positive territory, and you said earlier policy is just moving into that territory now. Im curious, how restrictive is rates at 4. 6 perspective . Is that expected to be next year, how restrictive . Chair powell if we look and we do get to this level, which i think is likely, what you are going to do is adjust that for some forward looking measure of inflation, and that could be you pick your measure. There are all kinds of Different Things you can pick. What you would get is a positive number. In all cases you will get forward Inflation Expectations for the short term that will be significant. You will have a positive federal funds rate at that point, which could be 1 or so, but i do not know what it will be but it will be significantly positive when we get to that level. Let me say we have written down what we think is a positive path for the federal funds rate. The path that we actually execute will be enough to restore price stability. This is something that as you can see they have moved up, and we are going to continue to watch incoming data and evolving outlook and ask ourselves whether the policy is on the right place as we go. Thank you very much