Summary of Federal Reserve System Update / Briefing September 17, 2025 Key Points Related to the Federal Reserve and Economic Conditions Economic Growth and Employment - The Federal Reserve noted a moderation in economic activity, with GDP growth at approximately 1.5% in the first half of the year, down from 2.5% the previous year [1][2] - Job gains have slowed significantly, averaging only 29,000 per month over the last three months, with the unemployment rate edging up to 4.3% in August [2][3] - The labor market is experiencing a decline in both supply and demand for workers, leading to increased downside risks to employment [3][6] Inflation Trends - Total Personal Consumption Expenditures (PCE) prices rose by 2.7% over the 12 months ending in August, with core PCE prices increasing by 2.9% [4] - Inflation expectations have increased due to tariffs, but longer-term expectations remain aligned with the Fed's 2% inflation goal [4][20] - The median projection for total PCE inflation is 3.0% for this year, decreasing to 2.6% in 2026 and 2.1% in 2027 [4] Monetary Policy Adjustments - The Federal Open Market Committee (FOMC) decided to lower the policy interest rate by 0.25%, bringing the target range to 4% to 4.25% [5][6] - The FOMC aims to balance its dual mandate of maximum employment and stable prices, adjusting policy in response to evolving economic conditions [5][6] - The median participant in the FOMC projects the federal funds rate to be 3.6% at the end of this year, down from previous projections [8] Risks and Future Outlook - The balance of risks has shifted, with increased downside risks to employment and a more neutral policy stance being adopted [6][16] - The Fed acknowledges the potential for persistent inflation but believes that the current labor market conditions warrant a cautious approach [20][25] - The Fed is committed to monitoring economic data closely and adjusting its policy as necessary to achieve its goals [29][70] Labor Market Dynamics - The Fed highlighted that the slowdown in job creation is largely due to a decline in labor force growth, influenced by lower immigration and participation rates [3][12] - Concerns were raised about the impact of a softening labor market on younger and minority job seekers, who are particularly vulnerable [26][40] Housing Market Considerations - The Fed recognizes that high interest rates have exacerbated housing affordability issues, impacting household formation and wealth accumulation [58][61] - The ongoing housing shortage is identified as a deeper, structural issue that the Fed cannot directly address through monetary policy [61] Conclusion - The Federal Reserve remains focused on its dual mandate while navigating a complex economic landscape characterized by low unemployment, moderated growth, and evolving inflation dynamics [9][70] - The Fed's actions are guided by data and the need to balance risks to both employment and inflation, with a commitment to achieving long-term economic stability [5][70]

My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. While the unemployment rate remains low, it has edged up. Job gains have slowed and downside risks to employment have risen.At the same time, inflation has risen recently and remains somewhat elevated. In support of our goals and in light of the shift in the balance of risks today, the Federal Open Market Committee decided to lower our policy interes ...

Schelsey with ABC News. The latest inflation report shows that prices are still going up across key categories for many households including groceries. What will the Fed do if prices pick up more.So our our expectation and you can see this consistently through the year has been that inflation will move up this year but that the the effect basically because of the effects on goods prices from tariffs but that uh those will turn out to be a one-time price increase as opposed to creating an inflationary proces ...

25 basis point rate cut. The Federal Reserve lowering their benchmark interest rate by a quarter percentage point to a new range of four to four and a quarter percent and signaling two more rate cuts this year. The decision was not unanimous.Newly minted Fed Governor Steven Myron dissented preferring to cut by 50 basis points instead of 25. As for the breakdown for rate projections this year, nine officials seeing three rate cuts in total this year. Six officials seeing one cut, one saw no cuts, and one saw ...

Chair Powell, do economic conditions and the balance of risks no longer warrant a restrictive policy setting. So I don't think we can say we can say that. What we can say is this, that over the course of this year, we've kept our policy at policy at a restrictive level and people have different views, but a clearly restrictive level, I would say so.And we were able to do that over the course of this year because the labour market was in very solid condition with strong job creation and all those things. I t ...

Higher tariffs have begun to push up prices in some categories of goods, but their overall effects on economic activity and inflation remain to be seen. A reasonable base case is that the effects on inflation will be relatively short-lived, a one-time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed.Our obligation is to ensure that a one-time increase in the price level does not become an ongoing i ...

Chair Pal, do economic conditions and the balance of risks no longer warrant a restrictive policy setting. So I don't I don't think we can say we can say that. What we can say is this that over the course of this year we've kept our poly policy at a restrictive level and and people have different views but a clearly restrictive level I would say.So and we were able to do that uh over the course of this year because the labor market was in very solid condition with strong job creation and all those things. I ...

Economic Overview - The Federal Open Market Committee (FOMC) has decided to lower the policy interest rate by a quarter percentage point due to rising downside risks to employment and elevated inflation levels [2][10] - GDP growth has moderated, with a rise of approximately 1.5% in the first half of the year, down from 2.5% the previous year, primarily due to a slowdown in consumer spending [3][4] - Business investment in equipment and intangibles has increased, while the housing sector remains weak [4] Labor Market Insights - The unemployment rate increased to 4.3% in August, with payroll job gains slowing to an average of 29,000 per month over the past three months [5][6] - Labor demand has softened, and the recent pace of job creation is below the break-even rate needed to maintain the unemployment rate [6][7] - Wage growth continues to moderate but still outpaces inflation, indicating unusual market conditions in both labor supply and demand [6] Inflation Trends - Total Personal Consumption Expenditures (PCE) prices rose by 2.7% over the 12 months ending in August, with core PCE prices increasing by 2.9% [8] - Near-term inflation expectations have risen due to tariffs, although longer-term expectations remain aligned with the 2% inflation goal [9] - The median projection for total PCE inflation is 3.0% for this year, decreasing to 2.6% in 2026 and 2.1% in 2027 [9] Monetary Policy Direction - The FOMC aims to balance its dual mandate of maximum employment and stable prices, adjusting the federal funds rate target range to 4% to 4.25% [10][15] - The appropriate level of the federal funds rate is projected to be 3.6% at the end of this year, lower than previous projections [15] - The committee remains committed to supporting maximum employment and achieving a sustainable inflation rate of 2% [16]

Good afternoon. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. While the unemployment rate remains low, it has edged up.Job gains have slowed and downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated. In support of our goals and in light of the shift in the balance of risks today, the Federal Open Market Committee decided to lower ou ...

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