Chair Jerome Powell announced an Interest Rate cut for the First Time Since the 2008 financial crisis. Following the announcement, he took several questions from reporters. This is 45 minutes. Good afternoon and welcome. Today to lower the target for the federal funds rate by a quarter of a ofcentage point to arrange two and a quarter percent. The outlook for the u. S. Economy remains favorable in this action is designed to support that outlook. Againsttended to ensure Downside Risk, to help offset the effects these factors are andng the on the economy to promote a faster return of inflation to our symmetric 2 objective. All of these objectives will support achievement of our overall goal, to sustain for the benefit of the american people. We also decided to conclude the runoff of our securities portfolio rather than and september as previously planned. In september as previously planned. I will discuss the thinking behind todays Interest Rate reduction and then turn to the path forward. As the year began, both the economy and Monetary Policy were in a good place. The Unemployment Rate below 4 , inflation had been running there are 2 objective for nine months. Are interestrate target was that the low ends of neutral. Over the first half of the year, the economy grew at healthy pace. And it pushed on appointment to near a halfcentury low. People who live and work and lower income communities telling wages have been rising particularly for lower paying jobs. People who live and work in low and middle income communities tell us that many who struggle to find work are now getting opportunities to add new and better chapters to their lives. This underscores the perfect of sustaining expansion. To the course of the year, weak Global Growth trade policy uncertainty in muted inflation have prompted to adjust the assessment of the appropriate path of Interest Rates. The committee moved from expected rate increases this year to a patient stance of about any changes and then to todays actions. The median conten committee abot appointment has also declined issue. Reinforcing the case for somewhat lower path for policy rate. These changes in the anticipated path of Interest Rates have eased financial conditions and supported the economy. At our june meeting, Many Committee participants saw the case for lowing had strengthened. But the committee wanted to get a better sense of the overall direction of events. Since then, weve seen positive and negative development. Job growth was strong in june and looking through monthtomonth fluctuations, the data point to continue strength. We expect job growth to be slower than lester but above required to hold on appointment restudied. Gdp growth in the Second Quarter came in close to expectations. Consumption supported by rising incomes and high housel confidence is the main engine driving the economy forward. But manufacturing output has declined for two consecutive quarters in business following the Second Quarter. Foreign growth has disappointed particularly manufacturing and notably in the euro area and china. In response to the weakness any pigs around the world are increasing policy accommodation are contemplating doing so. After simmering early in the year, trade policy tension nearly boiled over in may and june but now appear to return to a simmer. Look into this variability, or business context tell us the ongoing uncertainty is making some companies were cautious about the capital spending. The domestic inflation shortfall has continued. Core inflation which excludes food and Energy Prices and a better gauge of future developments and total inflation has run at 1. 6 over the past 12 months. We continue to expect the inflation will return over time into percent. But domestic completion of pressures remain muted and goebel disinflation pressures persist. Wages are rising another the pace that would put much pressure on inflation. We are mindful that inflations returned to 2 before they are delayed and continued below target inflation could lead to worrisome and difficult to reverse downward slide and longterm expectation. Taking all of the on board, the Committee Still sees a favorable baseline outlook. Over the year, incoming information on Global Growth, trade policy uncertainty and inflation have led the community to gradually lower assessments of the path the policy interestrate that would best support outlook. Today, we judge those doctors want the policy adjustment i described. As the committee contemplates the future path of the target range to the federal funds rate, it will continue to moderate implications of incoming information for the Economic Outlook and will act as appropriate to sustain the 2 objective. Thank you, im happy to take your questions. Hi and with the new york times. To your statement here, the question is, is there any reason to believe that a 25 basis point cut will be sufficient to expediently return inflation for target and if not, what are you going to be looking at to be giving to you that you need to cover. What is the hurdle . I think you have to look at, not just the 25 basis point cut, but the Committee Actions over the course of the year. As i noted in my opening statement, we started off expecting some rate increases, we moved to patient setting for a few months and now we moved here. What youve seen over the course of your is that we move to a more accommodative policy, the economy has performed just about as expected with that gradually increasing support. And i would not take credit for all of that but i think increasing policy ordinance has kept the economy on track in the outlook favorable. In terms of the rest of your questions, the committee is thinking of this as a way of adjusting policy to a more accommodative stance to further the three objectives that i mentioned. To ensure the Downside Risks to provide support to the economy that those factors are pushing down on Economic Growth into support inflation. We think itll serve all the schools but again we think it over centrally in the policy. Michael from Bloomberg Television and radio. Theres a perception that perhaps the fed is something of a hammer in search of a nail because the latest Consumer Spending reports as you suggested, dont show any kind of demand problem in the u. S. And when you look at mortgage rates, auto lending rates, they will come down and wondering exactly what problem lower capital cost will solve . You are absolutely right, the performance of the economy has been reasonably good, the position of the economy is as close to our objectives as it is been in a long time. And the outlook is also good. What we have been monitoring since beginning of the year is Downside Risk to the outlook from weakening Global Growth and we see that everywhere, and now particularly in the european and china, and addition we see trade policy development which at times have been disruptive and less so, an also inflation many below target. So we see those as threats to what is a favorable outlook and we see this action designed to support them and keep the outlook favorable. Frankly it is a continuation of what we have been doing all year to provide more support against those very same risks. How does cutting Interest Rates lower, how does cutting Interest Rates keep that going to the cost of capital does not seem to be the issue . I really think it does and i think the evidence tells us that opposing the support, support confidence and Economic Activity, household and Business Confidence to channels that we understand. We will Lower Borrowing costs, and it will work. I think you see it since we noted that situation in june. Use all financial conditions move up and i want to credit for the whole recovery but you see confidence in june and he sought Economic Activity unhealthy basis, it seems to work through confidence channels as well as mechanical channels that you are talking about. Hi heather long from the Washington Post. You always say the fed is data dependent and much of the data that we have seen since the june meeting has surprise to the upside or has been in line with expectations. Can you give us a sense of how that better than expected data impacted the f1c inking and if we keep seeing the surprises, does that change or involve f1c thinking Going Forward . We course do what we do at every meeting, as i noted, we do a deep dive into u. S. Economic activity and goebel activity, and certainly carefully went through u. S. Economic activity which is been some positive and some negative, but overall it is shown resilient during a period. But again, the issue is more of the Downside Risks and triple inflation and were trying to addresses. So, in addition, Going Forward i would say, we are going to be monitoring those same things. We will be monitoring evolution of trade uncertainties, Global Growth and low inflation and we will also and course watch the u. S. Economy. I mentioned it shown resilient here to those issues and will put all of that together and thats how we will think about policy Going Forward. I just want to follow up on that. Would you say you guys have gotten into a new regime, this is sort of been an insurance cut and i data dependent cut, are we now more in the realm of watching headlines of trade talks and we are watching Unemployment Rate and inflation numbers, how do we know what youre going to do next and why in the new region . Three reasons for what we did, to ensure Downside Risks from trade tension. That is innocent Risk Management point in a bit of insurance. But we also feel like week Global Growth intentions are having an effect on the u. S. Economy. You see on Second Quarter, you seek weak investment and weak manufacturing. In support there. And also and also supports the return of inflation to 2 . There is definitely an insurance aspect of it. Trade is unusual. There is not a lot of experience in responding to global trade tensions. So it is something that we have not faced before and we are learning by doing. It is not exactly the same as watching global where you see growth weakening and Central Banks and governments responding with fiscal policy, and you see growth strengthening, and a business cycle. With trade tensions, which do seem to be having a significant effect on Financial Market conditions and on they evolve in a different way. And we have to follow them. I want to be clear. We play no role whatsoever in assessing or evaluating trade policies other than as trade , policy uncertainty has an effect on the u. S. Economy in in the short and mediumterm. We are not in any way criticizing trade policy, that is really not our job. Nick thimeros, the wall street journal. Chair, you and your colleagues have offered three reasons to cut rates. A lower neutral rate that may have made policy a little tighter. The global slowdown from the darker risk picture from the trade tensions, and the desire to recenter inflation expectations. Which of those factors weighs most heavily on you . And more importantly, is a quarterpoint cut going to address all of that, let alone any one of those . Chair powell i actually think different people have different weightings. That has been my experience on those things. You mentioned lower trade slowdown, and i would actually add, lower natural rate of unemployment. It has also moved down all of , which point to more accommodation. I do not think asking about a quarterpoint is the right question. You have to look back over the course of the year and see the committee moving away from rate increases, to a neutral posture, to now a rate cut. I think we have been providing and that affects the financial conditions. You see any economy which is actually performing pretty well. Growth in the first half of this year is about the same as it was in all of 2018, and a little better than our forecast for growth in 2019. I think in a way, that is Monetary Policy working. I would not just look at the 25 basis point cut as the right question. In may, it seemed as if you were setting a higher bar to cut rates, there would need to be a deterioration in the outlook. To suggestu seemed that if the outlook didnt improve there may be a rate cut. ,wheres the bar right now . There is think confusion of how the committee is responding. Chair powell we noted at the bottom of the statement that language that really says how we are thinking about it, it says as we contemplate the future path of the target range, the federal funds rate, we will continue to monitor the implications of incoming information and talks about that language. All i can tell you is we will be looking at weak Global Growth. We will be looking carefully to see how that is happening. You learn every cycle. So we will see whether growth is picking up, whether it is bottoming out we will see that , picture. We will also see on trade. We have learned a lot on trade in this cycle i think we will , continue to learn more. And on inflation, the u. S. Economy itself the performance , of the u. S. Economy will enter in. I would love to be more precise, but with trade, it is a factor that we have to assess in a new way. Those are the things we will be looking at and making decisions Going Forward. Edward lawrence, fox business network. A rate hike last december was seen as some economists as a step too far. Now the fed has waited about seven months for a rate cut. You said today that you are concerned about Downside Risks. Could some of the weakness on be because thede fed waited so long. And talk about why you feel the feel this nigel is the right level. Chair powell we do not hear that from businesses. They do not come in and say we are not investing because the federal funds rate is too high. I have not heard that from a business. What you hear is that demand is weak for their products. You see manufacturing being weak all over the world. Business investment is weak and i would not lay all of that as a door of trade talks. There is a Global Business cycle happening with manufacturing and investment. And thats been definitely a bigger factor than we expected late last year. Global growth started to slow down in the middle of last year, but that has gone on to a greater extent. And by the way trade policy , uncertainty has also been more elevated than we anticipated. In terms of we believe this is the right move for today, and we think it will serve the three ends that i mentioned. I have already gone over how we are thinking about Going Forward. You called it a midcycle adjustment to policy. What should we take this to mean . Message mean to send with this move today about future rate moves . Chair powell the sense of that , that refers back to other times when the fomc has cut rates in the middle of a cycle. I am contrasting it there with the beginning for example, the beginning of a lengthy cutting cycle. So we are not at the beginning of a lengthy cutting cycle . Chair powell that is not what we are seeing now. That is not our perspective now or our outlook. Are there any circumstances under which you would decide to pause at one Interest Rate cut, todays Interest Rate cut and not go ahead with further monetary easing at this stage . Or are you predicting that once you have embarked on this easing, you will have to at least move by one more notch Going Forward . Chair powell our policy will depend on the implications of incoming data for the Economic Outlook as well as involving , risks to that outlook. So we are going to be monitoring the implications of incoming information for the outlook, as i mentioned. So that is where i will leave you with that. Hi, victoria guido with politico. On capital, vice chairman has said that the level of Capital Requirements that exist right now are such that it is like the isntercyclical buffer already turned on, and he would like the ability to turn it down in a downturn. I was wondering if you agreed with that. Also, on realtime payments, larger banks have suggested that if the fed built its own system, that would be a bait and switch because the fed called for a privatesector system. Do you think that is a Fair Assessment . Chair powell ok, on the first. I would say that i view the level of Capital Requirements and level of capital in the system to be about right. I do agree with that. The idea that you are talking about is one that the vice chair has talked about and that is one , under consideration. In a sense, we have chosen in the u. S. That have high through the cycle requirements by doubling the surcharge that the largest banks have in their cap requirements. We in effect have already put in place countercyclical buffers. I am not saying it is the same thing. That is really the point is that we do not rely our system does no