Fed's Powell Says Data Show Labor Market No Longer Solid

Economic Policy Insights - The current economic conditions do not warrant a shift away from a restrictive policy setting, indicating that the policy remains at a clearly restrictive level [1] - The labor market has shown solid conditions with strong job creation, but recent revisions to job creation numbers suggest a potential softening in the labor market [2] - The balance of risks between inflation and economic growth is moving toward greater equality, suggesting a potential shift toward a neutral policy stance [3] Interest Rate Decisions - There was no widespread support for a larger than 25 basis points rate cut during the recent meeting, indicating a cautious approach to monetary policy adjustments [4] - The company has implemented significant rate hikes and cuts in the past five years, typically in response to misalignments in policy, but currently feels that the existing policy is appropriate [5] - The company is reacting to evidence of softening in the labor market and lower job creation levels, which may warrant a change in policy direction [6]