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Saturday, November 27, 2021

Notable Statements from Fed Chair Powell’s Press Conference

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Federal Reserve Chairman Jerome Powell held a live press conference to address the Fed’s decision to freeze interest rates through 2022. Powell also elaborated on the Fed’s decision to target an annual two-percent inflation rate. HEADLINE compiled a list (available below) of Powell’s statements-of-interest to business owners, state and local leaders, teachers, finance students, and Americans everywhere that are invested in the U.S. economy.

On the subject of interest rates:

  • When members of the Federal Reserve make reference to or release statements on “interest rates” they are primarily referring to the mechanisms with which the federal government finances debt, such as through the bond market.
  • While there is a correlation between fiscal and monetary policy, “interest rates” as referenced by the Fed have only a tertiary relationship with retail interest rates set by banks, mortgage lenders, and credit card companies.
2020 Monetary Policy Report
Monetary Policy Report 2020. Image courtesy of Federal Reserve.

Notable Statements by Fed Chairman Jerome Powell: 

  • “Interest Rate running well below 2% inflation goal.”
  • “When the time comes, after the crisis has passed, we will put the tools back in the toolbox.”
  • “The current economic downturn is the most severe in our lifetimes.”
Fed Chair Powell on
Chair Powell in remote FOMC meeting. Image courtesy of Federal Reserve (9 June, 2020).

  • “We are now buying 120 billion in (Federal Government) Securities per month.”
  • “Monetary Policy should not be the first line of defense for financial stability.”
  • “For many borrowers they are in a situation where their business is still shut down and they won’t be able to service a loan. In that situation they’ll need more (federal stimulus) support.”
  • “I would certainly not say that we are out of ammo.”
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