one of the things ts that push the yields higher, and the one question for me is if the fed is starting to change what they believe is the terminal policy rate, and is it pushed higher given the rate of inflation and jobs andeverything else. >> that the thing to watch for there, and what the terminal or lowest rate may be. let's get to steve liesman for fed's decision. >> the federal reserve is cutting the rate by 0.25% or a mid range of 4.50 to 4.75. there was no dissent by the fed governor michelle bowman and they will continue to consider adjusting the funds rate, and looking at the data and the rix s -- risks and the outlook adds well. and the mandate is higher inflation or higher unemployment, but it is seeing the risks as roughly balanced, it says, and the economy is

expanding at a solid base, and the same language of last time, and the markets have generally eased where in the prior statement they said that the market was better or a characterization than it had been, and inflation has made progress to the 2% market, but it remains elevated. it removed the line that the committee has gained confidence that it is moving toward 2% and i don't know what that means or where it is going to, and it is going towards the goal of the 2% target or the dual mandate. it says the market is uncertain, and reducing the balance sheet. kelly, that is a waveless or splashless quarter point post election cut. >> well, it is a little bit early, but you are right. steve, stick around. we will turn to the panel for more reaction and of course to look ahead to the press conference coming at half past, and jim, that is when we have seen the bigger moves. >> so it is. and look, ultimately, the fed is

going to try and key off of what is happening in the labor market. i think that inflation there is going to be coming down. it is starting to settle down, and they are making progress to the 2% target, and that is yesterday's news. tomorrow's news is what happens to payrolls. and look, ultimately, we have had some storms, and we have a lot of noise within the data, and this is stuff they have to sift through. their biggest concern is if there is a slowdown in the economy, and if the unemployment rates are to rise quickly, then they will have wished that they have continued on with the pace to cut interest rates, and that is what they will do. 25 today, and 25 in december and on a mission of 4%, and then eva evaluate. >> and they admitted to greater confidence of moving sustainably to the 2% target, and david, what does that mean? >> it is not meaning that much, and think try to use as small words as possible, and if they can get rid of a sentence, they will do so, and they are using

that language to justify a good move. but i am feeling good about the payrolls and after the election, you are not seeing the commercials to make people feel better, but a bounce of the small business confidence and all uncertainty going into the election, and people will be more positive of making business decisions. so i don't see a reason of slowdown and maybe slightly higher inflation in the months ahead, and so i don't see the fed to accelerate the race of rate cuts. >> stephanie, any thoughts? >> yes, and the thought of them doing that every other meeting the cuts from here. and we did not talk about the eci, the employment cost index of wages slowing down, and this is a result of the productivity picking up which is a great backdrop for the fed to continue easing even though the economy is holding up pretty well. wret we are sitting here with the noninflation pick up. so the thought that the growth

is going to be remaining solid here, the fed can continue the path on easing. >> sieve, turning to you on more color on the statement. any dissenters? >> no, not this time. and there was speculation and i guess from me, because i thought that michelle bowman who was unhappy with 50 would be unhappy with a further 25 which would be 0.75, and she wanted .0.25, and when a person dissents, they go one time, and let the objections go on, and then they go on with the committee, and raise your hand and let it be known, but i like the characterization of it said earlier and worth thinking about. the fed says in the statement that the risks are roughly balanced, but what is it doing? it is cutting rates. so it is indeed acting and regardless of what it is saying about the risks being balanced, it is acting as if the unemployment in the market, and

the revision, and maybe how this fed chair or other officials are characterizing the recent october report that we got which was messed up by the hurricanes and the strikes, but still, when you are looking through it, and i have talked to a lot of economists about this, it is wae weaker, because when you are adding back more from the employment look, and the risk/balance here, it is part of the recalibration, and that is one of the questions of chair powell, are you recalibrating or calibrating, and then we can get back to acting more align the lines of the data. >> does a new administration mean anything to the chair or the fed chairman? because obviously trump is known for speaking his mind? >> well, not yet. i think that if the fed will continue to cut gradually in the first of december and cut again, and then we go early on the next

year, and see what the policies are likely to make it through congress, and it is like a big implication, and if you have a big increase in tariffs off of the bat, that is going to increase, and make the fed nervous, and the fed is going to try to keep its head low, and see if it can avoid getting any new coming from the fed administration, and if anything is going wrong with the economy, i expect that the fed is going to blame the fed with it, and that is coming with the job and the federal reserve. >> imj i believe that the fed term continues into 2026, and any possibility that he may not fill out the term, either because he decides to step away or because he is basically pushed? >> well, there is always a possibility, right. i don't see it though. i don't place this as a very, very high component of potentially what president trump's policies would be which is to remove the fed chair. that is not the first stake in the ground that he is going to make. and like i said, it is clearly a

possibility, but so far, the fed is doing pretty much what he wants the fed to do, and he wants them to cut the interest rates, and they are in the process of doing that, and that should stabilize and help the economy, and ultimately the fed has a dual mandate of price stability and helpn unemployment. so whether it is chair powell or trump, they have to stabilize, and if not, they have reflex zif ti which is a rise in the unemployment that comes quickly. and so what the fed is focused on right now is making sure that the labor market is stable and healthy as possible and doing the rate cuts is to ensure that it happens on their part. >> and stephanie, what is the impact of what has been mentioned on the tariff front and just the general inflationary stance of this trump administration, and the previous one, they were cutting the rates by year three of his

term. >> and one, we think it is fairly stat nation and we looked for the one hit to gdp, and this is very stationary, but the thing is that it is not proper policy for them to hike the rates for the inflationary impact, because it is going to cause a serious downturn in the growth, and so they should hold, watch and see how it shakes out, and rather than acting hawkishly, and so it is a negative impact and one percent impact is a much more conservative number depending how it shakes out. >> and david, the entire agenda is one where they are trying to grow our way out of the myriad of problems. >> yes, but there are a lot of problems made, and the interesting question that we will all be grappling with is once there is no campaign, and only president trump, how does the president trump and the congress decide to move it forward with the policy, because

they won't implement everything that they promised. >> well, the pressure could come from the bond mark, and it is interesting to see those levels taking a breather today. >> yeah. >> go ahead, steve. >> i was just going to say, guys, and i have a question for the panel, which i have never done before, okay. the question to ask powell today is what does he think about the recent rise in interest rates and what that should say about fed policy. the answer powell will typically give is, well, who cares. these things go up, and they go down, and we watch them, and it is an input, but we usually look past the market movement, and how do you ask the question that doesn't give you the stock powell answer? >> jump ball. >> who wants to take it? >> i will start on it, and i would start that question by asking about the deficit. and the way i would ask that question is how does powell think or the chairman actually think about the rising deficit, and the potential to fund that,

and what impact that might have on treasury yields, and how might they react to that? clearly the high rates could fuel the economy, and adverse effect that is not necessarily accounted for. >> thank you, jim. thank you, jim. we take the fiscal policy as given, and this is what powell is going to say in response to that one. >> and how about you ask him, how much is the rates due to the higher growth expectations. >> he won't answer that. >> and what did you say, steve? i did not hear that. >> i can work with that, david. >> all right. >> that is not a bad one. >> stephanie, any final thoughts? >> yeah, you can ask him how he is thinking about if rates stay above 4.5%, and is the market doing some of the work in the opposite direction of what they are trying to do and how they feel about that, because right now the market is counter acting what the fed is attempting to do here today by cutting rates.

>> all right. great to be here with you as always, and appreciate your time. we go to bob pisani at the new york stock exchange. >> tyler, not much reaction there from the stock exchange because it is unchanged from where it was 10 minutes sor ago, and with good reason. the growth is decent here, and the economic activity is expanding at a solid pace, and inflation has made progress toward the committee 2% objective and not far from where it was at the last meeting here. i think that the problem is that for this press conference, nobody down here believes it is going to be about inflation or the trajectory of growth, and everyone down here believes it is going to be about tariffs and tax cuts and if powell is going to stay on if trump wants him to leave. and the fact is that he has always said that i am happy with my job and i plan to stay on until the end, and he has stuck

to the trajectory of economic data and avoided having theoretical discussions about anything with tariffs, but the fed's mandate is to address monetary concerns, and the fact that tariffs could be infl infla inflationary, and that could affect the fed's growth trajectory, and so it is a legitimate question, but i anticipate some tension here, because the press is rephrasing that question exactly, because these do fall within the fed mandate, and right now, we are essentially unchanged on the s&p 500. >> thank you, bob. >> to chicago with reaction of the bond market, and similar and taking it in stride right now, rick. >> yeah, taking it in stride. there is some interesting subtle moves below the hood that we should pay attention to it. if you are looking at the

intraday of two-year, it is the most responsive and hovering at 4.19 and around the great lowering and now around 4.23, but what is important is that if you are looking at the auction yield, and the auction yield for the three-year is 1.52 and the 10-year is 1.347 and both of them under water, and the only one that isn't is the 30-year bond, because it was auctioned later on in the process after the yield started to make a move. why am i mentioning the actions? it is because the selling yesterday was due to the auctions being under water, you sell it. that is part of it. and also, many are going to be talking about the neutral rate r-star and this magical yield that the fed thinks they will know about when it happens. it sounds a little bit like, you know, fiscal and monetary voodoo to me, and other than the fact that if you are looking at the

actual data points that we have had recently, and the last jobs report had a 30% revision from august to september, and calling into actual and with a 2 over here, and they have telegraphed it and been in sync with the markets, but ultimately how it is moving from here, i love the way that the panel is offering up fiscal policy and what the fed may do. because in the rearview mirror this fed has kept the interest rates so low, they were part of the problem with respect to allowing the government to overspend, because, heck, zero interest rates is not costing us anything. that has changed. the sudden interest of a fiscal policy now, and i would scratch my head what number 47 trump, and much to get him elected as a

bunch were presenting him with the issues and how the move, but one thing for certain, look for tax cut, and look for many in congress not to use the dynamic hedging and get it all wrong in terms of what the problem is. it is not a revenue problem. it's a spending problem. maybe that is what should be one of the first questions. back to you. >> rick, thanks. appreciate it. rick santelli keeping an eye on things. >> we are keeping an eye on chair powell's comments, and we pps. take you there when it haen and now, looking at this from former fed chair ryan ferguson. we will be right back with "power lunch."

♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month. welcome back to "power lunch" and the fed cut interest rates by quarter point and expect and the markets unmoved, but what do the investors want to hear from fed chair jerome powell? he is going to be speaking in 12

minutes. roger ferguson joining us former vice chair and member of the mock panel. roger, great to be here and maybe you can address the triple issue of the rising long-term rates -- deficit, inflation, real growth? how is the fed thinking of this backup of the significant backup of the yields since they cut the rates last time around? >> well, first, thanks for having me on, and i think it is a combination of the expectation of the increased deficits, and the fed cutting the rates as the fiscal policy is more stimulative, and the borrowing costs at the u.s. government is going to face is more likely to go up as opposed to going down as we have gone into a bout of what looks like pretty serious deficit spending. >> what is the fed's role when that is the case? no one is saying that, you know, that they need to react to fiscal policy, but in some ways

they can't ignore it either. >> well, no, they cannot ignore it, and so what they will do is to run it through the models and think about it, and they want to see if there is an inflation impetus that comes from it, and all of it depends upon whether or not productivity increases and the economy grows. uncertain for sure. so, let's wait and see. but i think that they will be a little bit more attuned to pick up on the inflationary risks as we find more and more increases to the debt. they will wait and see. >> if you are pointing to the idea of fiscally more stimulative things like tax cuts and stimulus programs in the pipeline here, and the effects of those would not show up for quite some time, and so i guess then that my question would be how soon would you expect the fed to react to that? would they wait and see until they can see the effects, or

would they move preemptively? >> well, it is very interesting question. they would certainly have to wait to see what the actual policy is, and it would take some time to propose to tax cuts to get them through congress, and so it is not an immediate thing, and so it is first, what is the policy. then once they get the size and the magnitude, they will run it through their models of the u.s. economy to throw out the best there, and so i'm not in any sense suggesting that the next move is up. i think they will wait and see what the policy is, and assess it in the analytical sense if it looks like the inflationary pressures are going to tick up. >> you can finish, please. >> go ahead. >> and i was going to say -- >> we shouldn't be. >> please, finish. i am sorry. >> we shouldn't be attuned to a sudden change in policy from either the administration or the

fed, so we are talking about something that is going to be playing out over quarters if not years, and so we should be very mindful of the time frame here that is not the next few meetings. >> that is what i was kind of driving at is that this is going to be playing out over time, the reaction to whatever the fiscal policy is, and it could be that interest rates are slowed or if there's a strong feeling that the policy is going on to be inflationary, and maybe interest rates go up a tick, and that is down the road under any of the scenarios that you can envision. >> yes, thatey are on the path, and inflation is coming down, and focused on the labor markets where i okay, but potentially weakening, and so i expect them to have at least one more cut this year in december, and then perhaps slow the pace of cutting as they are seeing how things are playing out. >> what are you listening for in the press conference?

>> i think that this is going to be a press conference that is going to try to make as little news as possible frankly. so -- [ laughter ] -- and so i think that effectively, is he just going to reinforce, chair powell going to reinforce the messages they have been giving over the last couple of press conferences is my expectation. so i think that it is going to be, and i this think he is going to be trying to keep it as even keeled as possible. i am pretty sure they are pleased that the markets didn't overreact either fixed or equity markets, and the goal here is to stay as close to the same as possible, and as close to previous statements as possible, and not to make brand-new news here. >> they are usually artful at not making news. mr. ferguson, thank you for your time. mr. roger ferguson, thank you. and we are moments away from jerome powell's coenmmts.

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lunch", everybody. we are wait for fed powell's comments at half past the hour, and we go to mike atoly, and what are you making of this here as kelly and i have gone from the most consequential presidential election to the most inconsequential fed comments in years. >> yes, that is how the fed chair powell likes it, low draw marks and the statement barely tweaked and it is reflecting the fact that the fed and the policy are in a comfortable spot for now. there is a moment when maybe the stakes will go up from here, but they are following the path that they have mapped out before in terms of normalizing the rates. i get a lot of the back and forth about what to make of the yield move on the long end of the curve, and do you think that it means a policy mistake or does it mean a deficit tantrum going on? i don't think that, because at

the end of july 31st, we were right there at the growth scare at the end of the yields, and the growth scare went away, and now it is helping to normalize the yield curve, and that seems to what is going on here, and if we see it fly from here on the yield, that is a different story, and we are in an economically resilient time, and the fed can deliberately adjust on the short end. >> mike, where are you going to be listening? where do they make it go into a market with a much bigger reaction even if that is not what they are hoping? >> well, i think that if somehow powell gets explicit about, you know, the december pause or maybe we are closer to neutral than we thought that we were, and i doubt it is the case, because he likes to be agnostic vocally about where neutral is, and just knowing that we are not there yet. and so i am not sure that there is anything that he is going to be making waves ant, and the

response to the fed fiscal policy, and where that is, and the dollar rally, and what he is making to the path of inflation is going to matter most of all, and what you have been talking about in the tweak of the statement, and kind of removing that confidence, that stated confidence that inflation is heading toward target, but what they know right now with the pce at 2.5% annual rate or core at 2.7%, you know, the fed fund at 4.75 is the wrong spot. so we have had room and lowered that. >> and they have to take out further progress has been made, because inflation is a big deal for them, and the legacy. >> that is right. exactly. they are still on the campaign, and as much as they say that the balance of risks is relatively equal right now, they recognize that they are still not at the end point of the fight of inflation that they have been going at for 2 1/2 years.

>> did you expect the market to just sort of chill a little bit today? >> well, for the most part. yeah, i mean, they could have used it as a excuse to back off of the russell 2000 going up, and the bank stocks going back, but nothing dramatic in the terms of the a giveback. >> mike santoli, thank you very much. and let's go to the quick market check to level set where we stand right now as we go to the fed chair. the dow is basically flat off 11 points at 43,718. the otherarometerbarometers, and the nasdaq is a bit higher. chair powell is entering the room. we will take it now. see you later. good afternoon. my colleagues and i are squarely focused on themandated dual

goals of stabilizing prices for the american people. the economy is strong overall and made significant progress towards our goals over the past two years. the labor market has cooled from the formerly overheated state and remains solid. inflation has eased substantially from the peak of 7% to 2.1% as of september. we are committed to maintaining the economy's strength by supporting maximum employment and returning plain "tod-- employment to 2% goal. and we take a policy restraint by lowering the interest rate by 0.25%. we are sure that by recal recalibrating the policy stance the goal of the market rate can be achieved by moving down toward 2%. we decided to retus the security

holdings. i will have more to say about monetary policy after briefly reviewing economic developments. recent indicators suggest that economic activity has continued to expand at a solid pace. gdp rose at an annual rate of 2.8% in the third quarter, about the same pace as in the second quarter. growth of consumer spending has remained resilient, and investment in yimt and intangibles has strengthened. in contrast, the investment in housing sector has been weak. overall, improving supply conditions has improved the performance of the u.s. economy over the past year. in the labor market conditions remain solid. payroll gains have slowed from earlier in the year averaging 104,000 for the past three months. this figure would be higher if it weren't for the effects of labor strikes and hurricanes on

employment in october. regarding the hurricanes, let me extend our sympathies to all of the families, businesses and communities who have been harmed by the devastating storms. the unemployment rate is notably higher than a year ago, but it has been enling down over the last few months. now, the wage growth has'sed over the years, and the employer's gaps are lessening. and the markets suggest that the market is less than the pandemic of 2019. the market is not a source of significant inflationary pressures. inflation has eased over the past two year, and total pce prices have rose 2.1% ending in september, and excluding the volatile food categories. and core prices rose 2%.

and overall, inflation has moved closer to the 2% longer run goal, but core inflation is remaining somewhat elevated. long term goals are to be under rupted as measures from housing and other financial markets. now, the monetary policy actions are guided by the dual mandate to promote maximum employment and sustained prices to the american people. we see the risks to the prices as a tough balance and we are attuned to both sides of the mandate. today, the committee decided to low ter rate by 0.25%. this is further recalibration of the policy stance will help to maintain the strength of the economy and the labor market and further increase progress on

inflation as we move to a more neutral stance over time. we know that reducing policy restraint could hinder inflation. at the same time releasing too slowly could unduly effect inflation. in due to funds rate, the committee will carefully weigh the data for outcomes and presets, and we will continue to make our decisions meeting-by-meeting. as the economy evolves, maximum employment and stability goals will be sustained, but if we are not growing at 2%, we can dial it back. if the labor market were to weaken or inflation were to fall more quickly thans a pated, we can move more quickly.

policy is well positioned to deal with the risks and the uncertainties that we are facing in pursuant of both sides of the dual mandate. the fed has been assigned two goals for monetary policy, maximum employment and stable prizes. with remaining commitmented to maximum and we are going to well remain committed to the goals. we understand that our actions are affecting communities and businesses across the country. everything that we do is in service to the public mission. we at the fed will do everything that we can to achieve the maximum employment and price stability goals. thank you. i look forward to our discu discussion. >> thank you, given the expectation that the policies will influence actions next year, how are the policies

taking control of the next decisions including the next one in december, and can you give us a sense of how proactive or reactive the fed is in changes of economic policies in regard to the next administration? >> sure. let me say that in the near term, the election will have no effects on the policy decisions. as you know, many, many things affect the economy and anyone who writes down forecasts in their jobs know that the economy is quite difficult to forekags looking out past the near term. here we don't know what the timing or the substance of any policy changes will be, and we therefore don't know what the effects on the economy will be, and to the extent of whether or what extent the policies of the maximum employment and price stability, we don't guess, and we don't speculate and which don't assume. now, just in principle, it is possible that any administration's policies or policies put in place by

congress could have effects over time that would matter and so, along with other factors, those effects would be included with miles of the economy through that channel. >> nick? >> chair powell, nick from "the wall street journal." roughly one year ago when the 10-year pressure ri was flirting with 5%, and the mortgage rates were near 8% you noted the higher borrowing costs if sustained could weigh on economic activity and given what you said 2345 the policy is restrictive and the fed is dialing back the restriction, are growth perspectives any different today than those you identified a year ago when inflation was still meaningful above your target? >> no, i would just say this, we

have watched the run up in bond rates, and it is near where it was, because the rates have been far below, and too early to tell where they will settle, but we have all read the decompositions, and i certainly have, but it is not our job to provide the decomposition, but it appears that the moves are not principally about higher expectations burk more the likelihood of stronger growth and less downside risks. we do take and if they are consistent then we will take them into account in the policy, but we are not at that stage yet, and we are is just

watching. these don't have anything to do w with. >> and with the projections from the ssp, are they still valid? >> between the last cycle and this cycle, i would not want to comment one way or another. and talk about the data that we have gotten since the last meeting. in the main, the main economic data activity is stronger than expected. the nipa employment was stronger, and october report not stronger, and september sfwlrnlgt and the down risks and the economic activity having been revised with the nipa revisions overall in particular and feeling good about the economic activity, and so we would factor that in, and at the same time, we have one inflation

ant so we will have more data, and one more report, and two more inflation reports, and more data and so we will make a decision as wet get to december. >> gina from "the new york times," and thank you for taking our questions, chair powell. when it comes to december, what are you going to be looking at specifically as you make that decision, and as for the fed's economic decisions in september you wrote down four quarter point cuts in 2025 and are you still looking at that likely and is that a baseline outlook, and if it has shifted at all, and can you tell us detail why? >> we don't fill out an s.a.p. and i cannot characterize one that was filled out today, so i

don't speak to, and every incoming and we are in the process of recalibrating from a restrictive effort of 3.3 rm data points, and is that where we need to be, and we are trying to or allow the market to weaken too much. so we are trying to be in a middle path to enable and strengthen the market, and that is where we are, and that is the question that we will be asking in september and any other meetings. again, i can't update you on the committee's thinking, because we don't fill out an sep attend of the meeting. >> when it comes to your own

thinking, is a full percentage cut in december a reasonable outlook? >> fwan, we will wait and see how things come in december. it is just -- let me put it this way. we are on a path to a more and that has not changed at all since september. you know, we are just sgrmgt >> and i am not ruling it out or in, but i would say that, you know, again, we didn't update the s.a.p., and so i won't kashg idz where the committee would be. >> thanks. howard schneider with reutersb and i am wondering if you can elaborate or explain the two changes of the language of the statement here in the first

paragraph where you said that you dropped the word "further" and is there any substantive language meant to communicate anything about the stickiness of the core inflation in the last three months? >> not necessarily, no. let me tell you what we were thinking. the test of gaining further confidence was for the first rate cut, right? so we met that test in september. therefore we take that test out. it is brant new foreign guy dance and we have to say yes/no at every meeting if we have made progress, and the fact is that

we have gained confidence that we can sustain the path down the 2%. that is what that is and neither of those is to send and we don't believe it is meant to be a lot of forward guidance and there is a fair amount of uncertainty there, and on the path we are on, we do know what the destination is, but we don't know the right pace, and we don't know exactly where the destination s and so the obvious, the point is to find that, to find the right pace and the right destination adds we go. i think that there is a fair amount of uncertainty about that, and you don't want to tie yourself up with guidance. you want to be able to make sensible decisions as you go. >> steve liesman, cnbc, and mr. chairman, you were talking about the higher rates from expectation of higher growth,

but you did not talk about it from the expectation of higher deficits, and is that something behind the recent rise of interest rates or the rising deficits are concerned here? >> so, we know that common and fiscal policy, and again, i don't have a lot more to say on what is driving bond yields. in terms of and let me give you a sense of how this works in the ordinary case. let's say that congress is considering a rewrite of the tax laws, and it does not matter the context, and we would follow that. at a certain point we start to see the outline, and we would model it, and wait and wait, and the certain point the staff would brief the fomc, and there is a ton of literature of the tax policy changes on the various parts of the economy, and we would try to be pas and

then when it goes along with the model along with a million other things rmg u and a law change would go in there, and it would go in, but it is a process to take some time, and clearly the legislative process takes and the overall effect on the economy at a givenment a of time, and that is what we go through all of the time with every admin, and it is such an ez early stage, we don't know what the policies are. when we do, we will know when

they are implemented sflirmt and all of that is going to take time, and it is going to be very much regular order if we can do that. >> if i could follow up on nick's question. are the current rates something that you feel that you need to lean up against in the way that they go against the current policy in that they add the given signal that you should do less? >> look, i think that the first question is how long are they going to be sustained? and if you remember the 5% tenure, and people were drawing massively important conclusions only to find three weeks later that the 10-year was 15 basis points lower, so it is the basis points that last that matter. we don't know about these. what we have seen so far, we are watching and reading the decomposition, and reading others the, but right now, it is not a major factor in how we are thinking about this.

>> thank you. chris, associated press. you mentioned the positive economic data that we have seen since the september meeting including the revision to things like higher savings and gdp growth and we saw the stock market jump yesterday, and it is renewing the questions of why do any cuts at all with this backdrop. >> so, you're right. as i mention and you have mentioned, the latest economic data is strong, and that is a great thing and highly welcomed, but of course our mandate is maximum for employment and price stability and we think that even with the cut policy today, it is restrictive and we understand it is not possible to say how restrictive, but we feel it is still restrictive, and if you are looking at the goal variables, the labor market has cooled a great deal from the overheated state from a few years ago. it is continuing to cool albeit at a modest rate, and we don't

need further cooling to achieve the inflation mandate. and inflation has been coming down from the highs of two years ago, and we have judged that it is on a sustainable path back to 2%, and the recalibrate our policy stance to reflect this progress and today's decision is really another step in that process. overall, as i mentioned, we believe that within an appropriate recalibration of our policy stance, we can maintain strength in the labor market, even as our policy stance enables further progress toward our inflation goal. >> great and just to follow up, could you -- what might cause you to pause rate cuts in december? what kind of economic data would lead you to that path? thank you. >> so, we haven't, you know, made any decision like that at all, but we're -- we're in the process, as i mentioned, of moving policy down -- our stance down over time to more neutral level, and as a general matter, as we move ahead, we are

prepared to adjust our assessments of the appropriate pace and destination as the outlook evolves, so for example, if we were to see the labor market deteriorating, we'd be prepared to move more quickly. alternatively, as we approach levels that are plausibly neutral or close to neutral, it may turn out to be appropriate to slow the pace at which we're dialing back restriction. again, haven't made any decisions about that, but that's certainly a possibility. you can think of it as similar to what we do with asset -- with asset runoff, with qt. so, we reach a point where we slow the pace, much like an airplane reaching the airport slows down, and so it, you know, we're thinking about it that way, but it's something that we're just beginning to think about. >> edward? >> thanks, chair powell. so, with the noise in the jobs reports that we've seen, and you look at the fed's favored

inflation, overall it's 2.1%, very close to the fed's target, but core inflation is 2.7%, and it's been that way since july, so why doesn't this data give fuel to a rate pause for this meeting? >> well, so, i think if you look at the three and six-month -- you're quoting the 12-month. we look at all of them, but if you look at the three and six-month core pce, you'll see they're around 2.3%. so, we look at all of them, and we look at -- we also look at 12 as well, but what it's telling us is that we really have made significant progress, and we expect there to be bumps, for example, you know, the last three months of last year, the core pce readings were very, very low, probably unsustainably low, so that's why you see -- that's why forecasts generally see a couple of upticks toward the end of the year. on the other hand, the january reading, certainly, looks like an example of residual seasonality so that that -- we

saw last year, so when that falls out of the 12-month calculation in february, we should see it down, so it will literally be a bump, up and then down. we understand that. overall, you see the progress on inflation, and you also look at the economy, and you say, what is the inflation story now? where's it coming from? i point to a couple of things. one is, thenonhousing services and goods, which together make up 80% of that -- of the core pce index, are back to the levels they were at the last time we had sustained 2% inflation, which happens to be in the early 2000s for a period of five, six, seven years, so they're back at that level. what's not is housing services. so, let's talk about housing services. housing services is higher. what's going on there is, you know, market rents, newly signed leases, are experiencing very low inflation, and what's happening is older, you know, leases that are turning over are taking several years to catch up

to where market leases are, market rent leases are, so that's just a catch-up problem. it's not really reflecting current inflationary pressures. it's reflecting past inflationary pressure. so, that's one thing. the other thing is i would say, look at the labor market, not a source of inflationary pressures. where's it coming from? it's not a very tight economy. what is the story about inflation? you see that catch-up inflation also in insurance and several other areas, so you're seeing -- we're not declaring victory, obviously, but we feel like the story is very consistent with inflation continuing to come down on a bumpy path over the next couple of years and settling around 2%. that story is intact, and it won't be one or two really good data months or bad data months aren't really going to change the pattern at this point now that we're this far into the process. >> so, quickly trying to get to that neutral rate that you see, or do you foresee that you have some time to get there? >> nothing in the economic data

suggests that the committee has any need to be in a hurry to get there. we are seeing strong economic activity. we are seeing ongoing strength in the labor market. we're watching that carefully. but we do see maintaining strength there. and so, we think that the right way -- the right way to find neutral, if you will, is carefully, patiently. again, that's not meant to have a specific meaning, other than we -- to the extent the economy remains strong, we have the ability to take advantage of that as we try to navigate that middle path between the two risks. >> hi, chair powell, craig torres from bloomberg. two questions today. did you learn anything about what americans think about the economy from the election results? first question. second question, i want to talk about some labor market indicators, and i do so with great respect for your

attentiveness to the maximum employment side of the mandate, chair powell. so, the unemployment rate has been at 4% or higher for six months. one of the broadest measures of unemployment is up about a half a point from a year ago. compensation gains are sliding back. the quits rate, a signal of labor market dynamism, has been heading down to that bad neighborhood of the 20-teens, so you have put a marker at jackson hole saying any further roocool is unwelcome. it is cooling, generally, a little bit further, so at what point do we reach what you would describe as a shortfall from maximum employment? thank you. >> sure. so, on your first question, i'm not going to talk about anything that relates directly or indirectly to the election. on the second one, this is the great question, and it's the one we think about all the time. i'll just say a couple things. nothing -- there's nothing really surprising here. what we know is that the

unemployment rate is low. we also know that it's come down significantly -- sorry, moved up significantly from a year or so ago, so we've seen a big change upward in unemployment. sometimes, that has meant bad things. so far, it doesn't appear -- it appears that the -- i wouldn't say that the labor market has fully stabilized because i do think it's continuing to very gradually cool, but it seems to be in a good place, and our policy, of course, is designed to keep it in that good place, to maintain the strength in the labor market while also enabling further progress on inflation. you know, you mentioned a bunch of indicators, and you're right, you know, the -- the openings to unemployment rate is back to a normal level. i would characterize it more broadly as normalizing. you mentioned wages. wages are still running just a bit above where they would need to be to be consistent with 2%

inflation unless productivity is going to remain at this high level. if we see productivity, you know, more sustainably at these high levels, then that would sustain higher wage gains, so i would say, in fact, you could say it the other way, that wage increases are now consistent with 2% inflation given current productivity readings, but of course, you know, the lure on productivity readings is whenever you see high readings, you should assume they're going to revert pretty quickly to the longer term trend. that has always been the case for 50 years. but you know, it may be that -- we're now five years, if you look at the revisions that came out a month ago, we're five years into a nice set of productivity readings, which are sustained and very healthy. but overall, it's a good labor market. we could talk about 20 different data series. we'll be looking at all of them, of course, but you know, we don't want the labor market to

soften much from here. we don't think we need that to happen to get inflation back to 2%. >> victoria. >> hi, victoria with politico. some of the president-elect's advisors have suggested that you should resign. if he asked you to leave, would you go? >> no. >> can you follow up on -- do you think that legally you're not required to leave? >> no. >> mike? >> michael mckee from bloomberg radio and television. you talk a lot about what the data are telling you and how you are dependent on the data, but in terms of forward-looking assessments of the economy, what are you hearing from ceos or other officials around the country? what did you hear today from the regional bank presidents about what companies and consumers

think about where the economy is going from here, rather than looking backwards, and does that match up with what your forecasts have been and what you think the appropriate policy path should be? >> so, it's hard to characterize a really interesting set of discussions we had, and you'll see them in the minutes in three weeks, but i would say this. i think the comments from our reserve bank colleagues and from the ceos that they talked to are pretty constructive on the economy right now. pretty constructive feeling that the labor market is, you know, back to normal to the point where it's no longer that much a discussion topic in their world, whereas two years ago, it was all they were talking about. so, they feel like the labor market's in balance. people feel good about where the economy is. demand is obviously pretty strong, and you know, you're seeing, what, 2.8% growth in the th