Claire Jones, Financial Times. Um, just a question on the dollar. We've seen it decline quite heavily this year.I was wondering if there's been any discussion about that at the meetings and how to what degree that may be complicating your attempts to get inflation back to target. Thank you. >> So, this this goes back to the division of labor between the Fed and the Treasury, as you I'm sure know. and you know that that the the Treasury only uh speaks to the speaks to the dollar. Um it's not it's not somethi ...

Hi, Chair Pal. Thank you. Uh well, can you give us a little more about what kind of economic data does the Fed need to see before uh you'll be ready to cut.I mean, do you need inflation back nearly to target. Uh are there other things in the pricing that you look for. Do you need to see weakening in the job market.What kind of things are you are you looking for. I mean, ultimately, it's it could be any could be any of those things, right. But but you know if you saw that the risks to the two goals were movi ...

Summary of Federal Reserve System Update / Briefing July 30, 2025 Key Points on the Federal Reserve and Economic Conditions Economic Overview - The economy is in a solid position with a low unemployment rate and maximum employment achieved [1][4] - GDP growth moderated to 1.2% in the first half of the year, down from 2.5% last year, with a stronger second quarter growth of 3% [2][3] - Consumer spending has slowed, while business investment in equipment and intangibles has increased [3][4] - The housing sector remains weak, and payroll job gains averaged 150,000 per month over the past three months [3][4] Inflation Insights - Inflation is running above the 2% target, with total PCE prices rising 2.5% over the past year and core PCE prices rising 2.7% [5][4] - Services inflation has eased, but increased tariffs are contributing to higher prices in some goods categories [5][6] - The Fed is focused on keeping longer-term inflation expectations anchored while managing potential inflation risks [7][6] Monetary Policy Decisions - The Federal Open Market Committee decided to maintain the federal funds rate at 4.5% [2][6] - The current monetary policy is viewed as modestly restrictive, appropriate for the current economic conditions [11][12] - The Fed is awaiting more data on employment and inflation before making decisions on potential rate cuts [12][13] Labor Market Dynamics - The labor market remains solid, with the unemployment rate at 4.1% and wage growth moderating but still outpacing inflation [4][21] - There are downside risks to the labor market, with job creation slowing and the supply of workers also declining [20][81] - The Fed is closely monitoring the balance of risks in the labor market and the overall economy [8][81] Future Considerations - The Fed is in a wait-and-see mode regarding the impact of tariffs on inflation and the broader economy [31][36] - Discussions are ongoing about potential revisions to the monetary policy framework, with a focus on balancing maximum employment and price stability [9][84] - The Fed emphasizes the importance of data in guiding future monetary policy decisions, particularly regarding inflation and employment [63][94] Additional Insights - The Fed does not consider the fiscal needs of the government when making monetary policy decisions, focusing instead on its dual mandate [40][41] - The independence of the Fed is highlighted as crucial for making data-driven decisions without political influence [73][74] - The Fed is monitoring the evolving economic landscape, including consumer spending trends and the effects of tariffs on inflation [76][78]

Uh, thanks, Mr. . Chairman. Uh, Andrew Ekerman with the Washington Post.Um, what message do you take from the fact that inflation hit 2.1% last September and has bounced higher since. Um, why do you think financial conditions are restrictive and a neutral rates below 4% when inflation has stopped falling for almost a year. >> So, inflation when you when you talk about these 12-month inflation measures, you're you're always battling uh residual seasonality.So we'll have for example two months of high inflati ...

Nick Timmeros, the Wall Street Journal. Chair Pal, my question is about what have you learned over the last few months about the inflation generating and price pass through process. And just to drill down, the June CPI report showed evidence of tariff induced goods inflation.Now, the tariff landscape uh is only starting to be settled with some of these more recent deals. Given the lags between when tariffs are announced and when they show up in goods prices, is two months a long enough horizon to evaluate t ...

The inflation picture is worse than the headline suggests. The Federal Reserve needs to hold off on rate cuts or that picture could get worse, and the outlook for equities with it. https://t.co/AH71BLvW3S ...

Economic Outlook & Monetary Policy - Consumption growth has slowed significantly, from 3% last year to only 1% this year, marking the first two descents since 1993 focused on consumer behavior and the labor market [1] - With inflation around 2-4% and short rates at 43%, the Fed's monetary policy is considered too restrictive, suggesting potential for more rate cuts than the dot plot indicates [1] Geopolitical Risks & US-China Relations - Despite potential diplomatic efforts, both the US and China are reportedly preparing for potential conflict over Taiwan [1] - The exchange of Nvidia H20 chips for rare earth magnets is viewed as a questionable transaction, potentially enabling China's military advancements [1] - Concessions to China are seen as enabling the modernization of their combat forces, particularly in AI capabilities [1] US-Russia Relations & Sanctions - President Trump is setting a deadline for a peace deal between Russia and Ukraine, threatening stricter sanctions if no progress is made [1] - The US has the ability to impose more impactful sanctions on Russia by targeting remaining foreign correspondent banks that facilitate dollar transactions [2][3]

Economic Activity & GDP - GDP and Private Domestic Final Purchases (PDFP) numbers aligned with expectations [1] - Economic activity data, including GDP and PDFP, slowed to slightly above 1%, specifically 1.2% for GDP in the first half of the year, compared to 25% the previous year, indicating a slowdown [2] Labor Market - Labor market remains balanced across various statistics, including quits, job openings, and the unemployment rate, similar to levels from a year prior [3] - Job creation is slowing, but so is the supply of workers, maintaining a labor market balance, though this balance is due to declines in both supply and demand, suggesting downside risk [4] - The primary focus is on inflation and maximum employment, with the labor market appearing solid [5] - Downside risks to the labor market are apparent [5] - Equilibrium job growth should be assessed by monitoring the unemployment rate, as both demand and supply for workers are decreasing in tandem [6] Monetary Policy & Inflation - Weakness in interest-sensitive sectors like residential investment and commercial structures raises questions about whether monetary policy is too restrictive [1] - Inflation remains above target, even when excluding tariff effects, justifying the current monetary policy stance [5]

Monetary Policy Stance - The Federal Open Market Committee decided to leave the policy interest rate unchanged, believing the current stance is well-positioned to respond to potential economic developments [2] - The committee decided to maintain the target range for the federal funds rate at 4 and 1/4 to 4 and 1/2% and to continue reducing the size of the balance sheet [8] - The current policy stance is seen as appropriate to guard against inflation risks [10] Economic Activity - Recent indicators suggest that growth of economic activity has moderated [3] - GDP rose at a 12% pace in the first half of this year, down from 25% last year [3] - Payroll job gains averaged 150000 per month over the past 3 months, with the unemployment rate at 41% remaining low [4] - Business investment in equipment and intangibles picked up from last year's pace, while activity in the housing sector remains weak [4] Inflation - Inflation has eased significantly from its highs in mid-2022, but remains somewhat elevated relative to the 2% longer-run goal [5] - Total PCE prices rose 25% over the 12 months ending in June, and core PCE prices rose 27% [6] - Near-term measures of inflation expectations have moved up on balance over the course of this year on news about tariffs [7] - Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen [9] Labor Market - Conditions in the labor market are broadly in balance and consistent with maximum employment [5] - Wage growth has continued to moderate while still outpacing inflation [5]

Core Points - Economic activity growth moderated in the first half of the year, with low unemployment and solid labor market conditions, while inflation remains elevated [1] - The Federal Reserve aims for maximum employment and a long-term inflation rate of 2 percent, amidst elevated uncertainty regarding the economic outlook [2] - The target range for the federal funds rate is maintained at 4-1/4 to 4-1/2 percent, with ongoing assessments of incoming data and risks [3][4] Monetary Policy Implementation - Effective July 31, 2025, the interest rate on reserve balances is set at 4.4 percent, with open market operations to maintain the federal funds rate within the target range [8] - Standing overnight repurchase agreement operations will have a minimum bid rate of 4.5 percent and an aggregate operation limit of $500 billion [8] - The Federal Reserve will reinvest principal payments from agency debt and mortgage-backed securities into Treasury securities, with a monthly cap of $35 billion [8]