him and he told them no. a lot shifting with a timeline for the white house has brushed off concerns about the uncertainty that is contributing to the market. sonali: tyler, we appreciate your time, looking forward to hearing from you later in the day, as we hear about the following from the latest announcement out of the oval office. want to check you back on markets now, because it is not only a brutal week, is now a brutal day as well. we are near session most of the s&p 500 when you had president trump the reciprocal tariffs on canadian lumber and gary could begin as soon as friday, threatening to disrupt cross-border trade. we look at the nasdaq 100, we are in correction territory. we are waiting for fed chair powell to speak. you can see the headlines. powell saying that the fed does not need to hurry, that they can wait for greater clarity.

we will keep an i on the bond market because the 10-year yield looks like it is holding steady and so does the two-year, and the market pricing has remained to be three rate cuts priced into the market. you are seeing fed chair powell urge a sense of caution. they say they don't need to hurry, they expected the path to 2% inflation will continue to be bumpy. this is the push-pull we have been talking about. the white house heading down towards greater tariff strategies and the fed saying wait a minute, we need to keep an eye on inflation. more headlines from the fed chair, he said the u.s. economy is still in a good place despite uncertainty. we had the job numbers out just this morning and a lot of concerns on what that might look like ahead. we are bringing you now into the speech from fed chair powell. mr. powell: a lot of familiar faces. i'm glad it turns out we don't have a majority of the fomc here. [laughter]

we can speak to each other without violating the sunshine law. so i have some brief remarks about the economy and the path of policy and that i look forward to our discussion. despite elevated levels of uncertainty, the u.s. economy continues to be in a good place. the labor market is a solid and inflation has moved closer to our 2% goal. at the fed we are intently focused on our dual mandate goals given to us by congress, maximum employment and stable prices. turning to the recent data, economy has been growing at a solid pace, gdp expended at 2.2% annual rate in the fourth quarter of last year, extending a period of consistent growth that has been supported by resilient consumer spending. recent indicators point to a possible moderation of consumer spending, relative to the rapid growth in the second half of 2024. recent surveys of households and businesses point to heightened uncertainty about the economic outlook.

it remains to be seen how these develop might affect future spending and investment. sentiment readings have not been a good predictor of consumption growth in recent years. we continue to carefully monitor a variety of indicators of household and business spending. turning to the labor market, many indicators show that the labor market is solid and broadly in balance. the jobs report released this morning showed employers added 151,000 jobs to payrolls in february, and the unemployment rate ticked up .1 last month. since september, employers added a solid 200,000 jobs on average. the unemployment rate has remained low. the jobs to workers gap has narrowed. wages are growing faster than inflation and a more sustainable pace than earlier independent

mike recovery. with wage growth moderating and labor supply and demand having moved in a better balance, the labor market is not a significant source of inflationary pressure. for inflation, inflation has come down in long wait from its mid-2000 many to peak of about 7% -- mid-2022 peak of about 7%, historically unusual and most welcome welcome. while progress in reducing inflation has been broad-based, recent readings remain above are 2% objective. the path to restoring your target has been bumpy and we expect that to continue. we see ongoing progress in categories that remain elevated, such as housing services any market-based components of non-housing services. inflation can be volatile month-to-month, and we do not overreact to one or two readings that are higher or lower than anticipated. data police last week show that total --data released last week show the total pce and core pce rose 2.6%.

we pay close attention to a broad range of measures on inflation expectations and near-term measures have recently moved up. we see this in both market and survey-based measures and survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor. it of on the next year or so, however, most measures of longer-term expectations remain stable and consistent with our 2% facing goal. looking ahead, the nguyen administration is --the new administration is in the process of implement significant policy changes in 4 distinct areas, trade, immigration, fiscal policy, and regulated. the net effect of these published changes will matter for the economy and monetary policy. while there have been developing since some of these areas, especially trade policy, uncertainty around the changes in their likely effects remains high. as we parse the incoming formation, we are focused on separating the signal from the noise as the outlook evolves.

we do not need to be in a hurry, and we are well-positioned to wait for greater clarity. policy is not a preset course. the economy remains strong, but if inflation does not move sustainably towards 2%, we can remain policy constraint for longer. if the labor market which we can on or inflation fall more quickly than anticipated, we can ease policy accordingly. our current policy stance is well-positioned to deal with the risks we face in pursuing both sides of our mandate. before i conclude, i will note that at our last fomc meeting, we began our second five-year review of our monetary policy framework. we will consider changes to our consensus statement and our communications as part of this review. the consensus statement articulate our framework for the conduct of monetary policy in pursuit of our statutory goals. we will consider the lessons of the past five years and adapt our approach where appropriate to best serve the american people, to whom we are accountable.

the 2% longer-run inflation goal will be retained and is not a focus of the review. this public review will be familiar to those who followed our process five years ago. we hold outreach events around the country involving a range of parties including fed listens events. we are open to new ideas and critical feedback. we will host a research conference in washington,. our intent is to wrap up the review by late summer. thank you very much. i look forward to your questions. [applause] >> right, thanks for that. before we get into the current conjecture, is there anything more you can share about where you think the framework is going to land? it was nice to hear the parameters that you laid out, but is there anything more that you can say beyond what you just -- mr. powell: sure, so i said two

things, really. there is changes to the consensus statement and they are looking at our post meeting communications. we will look at those two things a lot. as it relates to the consensus statement, also known as the statement on longer run goals on monetary policy, eating a shorter name, -- needing shorter name, we will be looking a lot at the changes we made in 2020. if you go back to 2020, we had been at the effective lower down for seven years and we never got rates above 2%. we were 1.5% when the pandemic hit. the feeling very much was even a mild downturn came, we would be back to the effective lower bound for years on end. we were looking for ways to minimize the likelihood of that, in a pretty standard result in the research was a makeup strategy. that is what that was. so the framework changes that we made were very focused on the importance of the effective lower bound problem, the problem

of the time. -- big problem at the time. those with the changes we made with others issues would be persistent. but the universe had other ideas. the pandemic arrived a few months after the framework and really changed the whole mixture. effectively the idea of an overshoot, a modest overshoot, moderate overshoot of inflation really became irrelevant, and we were back to the regular framework. we did what we did, and you have the results today. i think we will be looking at the focus in the consensus statement, the focus that we had on the effective lower bound. it is probably not the base case anymore, but it is probably still relevant. we will be looking at shortfalls, which is an interesting idea, but there are different ways to express that. certainly we will also be looking at the idea of having a moderate overshoot of inflation over the 2% target following

periods when inflation has been low. we will be looking at all of those things, and i expect to be done by the end of the summer. on the colbert caps, but ticket -- on the communications, particularly our post-meeting communications, we will compare ourselves to what other central banks around the world do. this will be a couple weeks from now, we will have our second meeting, and i think we will be done in time for the end of the summer. >> that's great. let me pick up on this question about the level of prices vs. the inflation rate. economists spend a lot of time making the distinction between the rate of change and the level. i'm not sure that the public fully understands this, because you see these surveys of how frustrated people are with inflation. inflation now is not that different than your target if it is about -- not meaningfully so.

do you think that price stability needs to take into account how far you go away from the objective and if you have a big run up and the level remains high, if the inflation rate is back to normal, is that some thing we need to reconsider? mr. powell: you know, what the public experiences is the prices of things, in the prices of things went up a lot in 2020 to 2022 and to some extent in 2023. when we talk about inflation, we are talking by the rate of change now. the public is not wrong, they are experiencing high prices, and obviously you can have a great labor market, but if people are really struggling because of high prices, that is what they are going to feel. they are right about what they are saying. in terms of -- i don't think there's any need to redefine priced ability. i think you can always go back to what alan greenspan said -- i

forget the exact words, but everyone here knows if businesses and households are making economic decisions without having to consider the possibility of high inflation, that is price stability. i don't think we need to rethink inflation, the way we deal with it. nothing we need to reinvent i stability -- i don't think we need to reinvent price stability. anil: ok, the elephant in the room --economists normally assume a tariff is passed into domestic prices, and as the secretary of the treasury said yesterday, change the level of prices once, but wouldn't mean anything for inflation a year later. if we are looking at what happens over the next year, how would we know if the conventional view is not correct and that it is leaked into something more troubling? mr. powell: so i think start with a general, the general thought is if there's a spike

in prices, that is a one-time thing that is going to go through the economy, that it is not appropriate to react to, because our policy by design will reduce employment and activity and it would not have really be needed to be done. so you look through those things if you can. if you put that in the context of tariffs, i think if you look at where forecasts are, look at the blue-chip, everybody's forecasting some inflation effect from tariffs. it is very likely that of tariffs -- let's remember, we really don't know what is happening yet. we are at a stage where we are still very uncertain about what will be tariffed, for how long, at what level. the likelihood is that some of it will find its way -- it will hit the exporters committee importers, the retailers, and does -- the exporters, the importers, the retailers, and to some extent the consumers. in a simple case we know it is a

one-time thing, the textbook would say look through it. but the situation, you wouldn't want to also be sure of a couple of things. one is if it turns into a series of things and it is more than that and if the increases are larger, that would matter, and what really would matter it is what is happening with larger inflation expectations and how persistent are the inflationary effects. you want to look at all of those things. you want to remember the current context. we came off a very high inflation and we have not fully returned to 2% on a sustainable basis. gotta put all of that in the mix as you make the decision. i would point people back to 2019 when we had the tax cuts and jobs act, we had regulatory policy under president trump in the first regime. we wound up cutting three times because growth we can do so much.

there are many effects of tariffs. as i pointed out, it is the effect of all of these policies that matter, not sickly what is happening with tariffs. it is what is happening with growth and other things as a result of the broad changes in economic policy, not just tariffs. anil: just to put a point on this, i think i know what you're going to say, but the usual rule economists called is that when uncertainty is high, we are gradualist. i wonder whether you view that as the right benchmark or anchor to think about. mr. powell: i view it as the right benchmark or anchor for right now, and that is because of the cost of being cautious are very low. the economy is fine, it doesn't need us to do anything, really. we can wait and we should wait. there are cases where uncertainty is high where

uncertainty is eyewear that would not be the case. that would be, for example, if inflation expectations were clearly under pressure, or the beginning of the pandemic. uncertainty is unquestionably elevated, but nonetheless you act very aggressively because of the potential costs of not doing so. anil: that's interesting. i'll ask a couple more conjectural questions, but there's a lot of people in the room who are very curious about what you want to say about the basel iii and game. that is inside baseball, but people's wallets depend on this wasn't you want to say anything about that? mr. powell: absolutely. our view at the fed is to be very much intend to complete the basel iii endgame. the basel accords are important to set minimal standards for international banking around the world. we expect that we will be at we are kind of on hold until the u.s. banking agencies are back

up and running with new leadership. but once they are, we fully expect you get back to that work and complete the basel iii endg ame. i have good reason to think we will be able to do that. that's good -- anil: that's good news. a little bit of inside baseball, there has been a lot of discussion the last few weeks about changing some of these statistics emphasized about the economy, and the commerce department recently disbanded the federal economic statistics advisory committee. and i know during covid you felt like there were many indicators in the economy that were kind of broken or not so helpful. do we need to worry about whether the fed's ability to do its job might come into question because of deficiencies in the statistics? an are youd already -- let's do that and i will ask the follow-up. mr. powell: there is two different things.

it needs to be said that the government data we get from this government-gathered data we get from the bureau of economic analysis and bureau of labor statistics is incredibly important in the gold standard for data. being able to track what is going on in the economy is very, very important, and it is something that the united states has led in for a long time and something we need to continue. it's true that survey responses have gone down and that some of the data become a more volatile. that just means it is something we need to keep doing and invest in. i think that is important. on the pandemic data, that's a different thing. you needed to measure things like how many people are going to restaurants. you can look at opentable data and things like that. there were lots and lots of pieces of data we were getting about -- that showed people -- how many people were coming back to work, riding the subway, that

kind of thing. it turns out all the data isn't super relevant except in an emergency. the other thing is at the fed, we have always -- for some time now we have been trying to work with these very large data sets that are available in real time -- for example, from credit-card companies and things like that. trying to use these new and vast data collections in a real-time way is something that is really helpful. anil: ok, i was could ask you about whether or not there is some favorite private sector statistics that you think everybody should be looking at, but it sounds like you've just given us a hint on that. let me ask a couple longer-term questions. i know you are not in the job of reflecting yet, but when we look back at the rise of inflation and then it's decline, what do you think the lesson is going to be about what we have just lived

through? mr. powell: i think it is actually still early to say. the question of what happened and why and all the questions around the events of the pandemic and the inflation and the efforts to bring inflation down, economists will be battling over that long after all of us are gone. but i would say a couple things. one thing is just that the tails are fatter than you think. however fat you think the tails are, they are fed or than that. humans talk about uncertainty and everything is uncertain all the time. the tail ares fatt and with thee r everything. nobody saw the pandemic coming. that is one thing. secondly, if you look -- i talk about this at jackson hole last year -- it looks to me like what

you had was a global burst of infection everywhere the same -- global burst of inflation everywhere at the same time. you look at global factors, and it amounted to very strong demand, stronger than we thought. the forecast was two parts. part one was demand was stronger than we thought. we had in mind that recovery from the global financial crisis and instead we got this really high-powered response, expansion, recovery. the supply side. supply-sider was constrained. we lost 8 million workers and it took a long time to get them back. all of the supply stuff that was happening. that took longer than we thought to unsnaggle. we had never seen it before. we knew in real time it would be hard to get that right. those two things created inflation globally. and central banks stepped in and pretty broadly or back to close

to mandated inflation and implement close to the natural right not just in the united states--employment close to the natural right not just in the united states, but everywhere we learned some those lessons we will still be learning. anil: one other question in this direction. the u.s. has actually had the fastest recovery of all the major economies. do we understand why that is? does that -- there was a question in the last panel about potential growth. do you think that we are learning something now about what the speed limit for the economy is? is this just happenstance? mr. powell: i would put down -- i would put down the u.s.'s outperformance to three things. the first is just one would be structural characteristics, and that is more flexible labor market, highly developed capital market, cultural innovation,

rule of law, all the things that -- we have a venture capital industry, trying to do early-stage financing at banks. that is not going to work. all of those things make us -- account for 40 years of productivity that is double europe's productivity. that is thing one. thing two is just population. we had a big population increase in 2023, 2-- 2022, 2023. that doesn't help with per capita, but that moves topline. what was the third thing? oh, productivity. we had a significant burst in productivity. from a range of factors, you can never tell exactly where it is coming from, some of those suggest -- this gets to your last question -- suggest productivity will be a one-time event. people wind up automating a lot of functions and retail, because people didn't want to work in retail anymore. that may be a one-time thing.

technological development's might give us years and years of productivity. there are a whole bunch of other things. we don't know how long this burst of productivity will be sustained. but i think -- i never expected to see productivity this high for this long. our staff is marking up their estimates of potential growth for now and taking some signal about the future. we won't have that population thing going forward. but productivity has been really strong. i think it actually does raise, at least for the relatively near-term, the level of potential output. anil: ok, 30 years of teaching booth students, i have learned you have to end these things with a fun question. so who is your favorite central banker? i will give you a hall pass for anybody on the board while you have been there. mr. powell: define favorite central banker. living? anil: well, ok, you can

constrained to living or specify dead. [laughter] open-ended question. mr. powell: i will take the easy route and say paul volcker, who i didn't know -- did k now overtime pretty obviously -- in central banking, nobody wants to be working at a central bank when inflation is really high, but everybody who works at a central bank knows what they have to do when inflation is high. piece of the gold standard for that. that is the think -- h set thee for that. when you have a very high inflation, this is why we are independent. it is not for the good times, it is for the times when we do things that may be unpopular. that is our assignment. i think paul volcker establish that. that was not quite so clearly established at the time. i will go with paul volcker. anil: i will out you on a

private conversation that i don't think you will mind too much. the host of this event has a bunch of expert panels of economists where you can ask a bunch of questions and they will tell you who your favorite economist is, and jay powell's favorite economist is neil cash app. [laughter] mr. powell: true story. that was not a happy day. [laughter] anil: anyway, thank you. we are so glad you were able to be here and share your thoughts. mr. powell: thanks very much. [applause] >> there you have it, short n' sweet from the fed chair. jay powell with us from bloomberg at the u.s. monetary policy forum at the chicago booth school. i am joe mathieu in washington and this is "balance of power" on bloomberg radio. search bloomberg business news live. we have just gotten started with a lot to talk about. kailey leinz is next to me for

-- a little early, couple minutes early. we were listening to jay powell on what is a job stay in a down day with the nasdaq officially down in correction territory. kailey: as we heard from the fed chairman, stocks are up from the lows and we are in positive territory, although what we heard from the chairman is the same things he has been saying for some time they don't need to rush to adjust policy, they have been on hold, as we know. but he did acknowledge some uncertainty in the economic outlook. it was interesting to hear from him that they are trying to separate the signal from the noise when it comes to this administration. i guess that makes the fed and all the rest of us, too. joe: that is absolutely right, although interesting to see this turn in the markets because things were decidedly negative. we were seen declines of bitcoin, but that is coming off

its lows. some upset over the idea of the national crypto reserve, not actually buying the tokens, just using seized tokens. kailey: putting what the government already has into the reserve, not buying bitcoin, which was the hope of a lot of traders, that that would provide juice for cryptocurrency. it was interesting to get a note in my inbox saying that trump is gas lighting crypto again. this as crypto executives are convening in half an hour at the white house for the inaugural white house crypto summit. we have to continue to digest economics first. the jobs report we got today, the reaction from chairman powell, and how financial markets are viewing all of that. charlie pellett new york -- in new york will bring out the latest. charlie: down day on the dow, s&p, nasdaq, all declining. we had the dow jones industrial average higher, but right now looking at a loss of 45 points,

a decline of .1%. we have the nasdaq composite index down 1.03. tough day for a lot of big tech names. s&p, to keep it all in context, down 23, decline of .4%. nasdaq 100 index lower by .6%. nvidia shares down by 1%. amazon down 2.7%. microsoft tumbling 2.2%. s&p 500 index almost wiping out its losses is fed chair jay powell is saying the economy is doing fine while reiterating that officials remain in a no rush to cut rates. the 10-year at 4.26%. spot gold down four dollars the ounce, .1%. west texas intermediate crude, 66.99 a barrel. bitcoin, a lot of headlines there. lower by 6.2%.

briefly, after earnings, keep an eye on broadcom commit down day for big tech, down day for the rest of the market. broadcom up by 5.4%. shares of hewlett-packard plunging after earnings, down by 6%. recapping on this jobs friday, dow, s&p, nasdaq all in the red, drop of .4%. "balance of power continues" right now. back we go to washington. once again, your hosts, joe mathieu and kailey leinz. kailey: i'm kailey leinz alongside joe mathieu on this jobs friday. jobs day actually coincides with pretty lengthy remarks from fed chair jay powell before the fed enters its blackout period. march meeting the week after next. the fed is not expected to do anything of that meeting and the chairman basically confirmed it, suggesting there was no hurry to make furtherpo