Fed Chair Powell's Speech: Labor Market Weakness, Inflation, Growth

Balancing Inflation, Jobs, and Market Valuations: The Fed’s Dilemma Federal Reserve Chair Jay Powell recently pushed back against expectations of multiple rate cuts in 2025. While the Fed trimmed rates by 0.25% to 4.0–4.25%, Powell cautioned that “easing too aggressively could leave the inflation job unfinished.” Key points: Inflation risks remain tilted upward, especially with tariffs pushing up consumer prices. The labour market is showing signs of weakness, making prolonged restrictive policy risky. Powell also noted that stock prices appear “fairly highly valued,” highlighting another area of caution for policymakers. The Fed faces a delicate balance: protect jobs, control inflation, and avoid fueling asset bubbles. With the FOMC divided, some calling for more cuts, others resisting any, policy uncertainty is high. Markets, meanwhile, are still pricing in at least two more cuts this year. How should central banks navigate this tension between price stability and employment? Is caution better than stimulus at this stage? #FederalReserve #MonetaryPolicy #Inflation #JobsReport #StockMarket #Finance #Economy

📊 U.S. Federal Reserve: Navigating Inflation vs. Jobs Jerome Powell reiterated that the Fed faces a delicate balancing act: addressing persistent inflation while avoiding unnecessary damage to the labor market. 🔑 Highlights: Rates now at 4%–4.25% after a 0.25% cut. Fed officials are divided: some advocate for quicker easing to support jobs, while others warn against inflation risks. Powell emphasized there is “no risk-free path”: Cutting too fast risks a resurgence in inflation. Cutting too slow risks higher unemployment. 📅 The Fed’s next policy meeting is October 28–29, with further cuts projected but not guaranteed. 🌍 Context: Job growth slowed to ~25,000/month (below breakeven levels). Inflation remains elevated, partly due to tariffs. Fed credibility is under scrutiny amid political pressure and global comparisons. 💬 How should the Fed prioritize in the current environment—controlling inflation or safeguarding employment? #FederalReserve #MonetaryPolicy #JeromePowell #Economy #InterestRates #Leadership

**Fed Chair Jerome Powell** delivered his final remarks before the upcoming FOMC meeting, highlighting the U.S. economy’s unusual mix of strong GDP growth and a weakening labor market. With official data delayed due to a government shutdown, the Fed is navigating uncertainty using private indicators and projections. Investors anticipate two quarter-point rate cuts—one in October and another in December—bringing the benchmark rate down to the 3.75%-4.00% range. However, policymakers remain divided: some worry inflation will stay above the 2% target, while others fear a deteriorating job market. Tariffs, reduced immigration, and AI-driven productivity gains are creating conflicting pressures. While some economists warn that inflation could rise to 3.3% by 2026, others see a potential productivity boom that could support growth without stoking prices. The Fed’s challenge: balancing rate cuts to support jobs without reigniting inflation. As Powell put it, the economy is being pulled in multiple directions—and something’s got to give. Source: Reuters #FederalReserve #JeromePowell #InterestRates #USEconomy #Inflation #Unemployment #MonetaryPolicy #AIInvestment #Tariffs #EconomicOutlook #ReutersBusiness #FOMC

📊 Fed Pivot Watch – Key Takeaways from Powell & Bowman Two major Fed speeches today confirm what markets were already sensing: 🔻 Growth is slowing 📉 Jobs market is losing steam 💸 Inflation remains elevated but mostly due to tariffs Powell: ▪ GDP slowed to ~1.5% in H1 2025 ▪ Job gains fell to just +29k/month ▪ Inflation (core PCE) at 2.9%, but tariff-driven ▪ Fed cut rates 25bps → 4–4.25%, moving policy “closer to neutral” Bowman: ▪ Labor market is “fragile” & payroll data may be overstated ▪ Core inflation near 2.5% ex-tariffs → room to ease ▪ Supports a proactive approach & signals more cuts ahead 📌 Bottom line: The Fed is shifting focus from inflation to jobs. The pivot has begun — expect markets to price in more cuts if data continue to weaken. 💬 What do you think: Will the Fed move faster from here, or stay cautious until inflation is firmly at 2%?

Fed Rate Cuts: Opportunity or Risk? On September 17, the Federal Reserve delivered a small rate cut. But inside the Fed, views are diverging on the path forward: Labor market softening: August added just 22,000 jobs, with unemployment rising to 4.3% — a signal that weaker employment supports further easing. Inflation still sticky: Price pressures remain above the 2% target, prompting some officials to call for caution. As an investor, I plan to slow the pace of adding rate-sensitive assets, while paying closer attention to duration control and cash flow quality. The question now is: 👉 Are you more concerned about rate cuts falling short of expectations, or about an inflation rebound delaying further easing? Why? #FederalReserve #InterestRates #Investing #Inflation #Markets

Navigating Economic Challenges: The Fed's Latest Moves The labor market is showing signs of weakness—an alarming reality for the economy. This isn't just a statistic, it’s a wake-up call. – Unemployment is on the rise. – Inflation concerns are still lingering. – The Fed is caught between stagnation and rising prices. In the face of these challenges, Federal Reserve Chair Jerome Powell has issued a critical message: a recent rate cut is a reflection of a more accommodating policy aimed at balancing these dual mandates. – This is about stability in a shaky market. – It’s about acting before conditions worsen. – Lower rates can help stimulate economic growth. Powell's acknowledgment of the downward risk to employment highlights an urgent need for careful navigating through these turbulent waters. Food for thought: As the Fed grapples with maintaining stable prices while supporting the labor market, what measures do you think could be taken to safeguard economic stability while addressing the current inflationary pressures? #Economy #FederalReserve #InterestRates #LaborMarket #Inflation #EconomicPolicy Link to article: https://lnkd.in/eV_9ZCNW

The Fed Conundrum! Fed Chair Jerome Powell said the U.S. faces a “challenging situation” with risks from both inflation and slowing job growth. He gave no signal on the timing of rate cuts, warning that cutting too fast could reignite inflation while delaying could hurt jobs. Powell also noted that stocks and asset prices appear “fairly highly valued.” #FederalReserve #JeromePowell #USEconomy #InterestRates #Inflation #LaborMarket #StockMarket #SPX

Fed cuts rates amid growth moderation On Sept. 17 the Federal Reserve said U.S. growth moderated in the first half of 2025, job gains slowed but unemployment stayed low, and inflation increased and remained elevated. The Fed trimmed its target range for the federal funds rate to 4–4¼% and continued reducing its holdings of Treasury and agency securities. RBC notes that this quarter‑point cut is about risk management and resetting expectations rather than materially stimulating the economy. The firm argues that the cut alone will not have much economic impact because markets have already priced in further easing and fiscal policy will matter more. Investors should monitor inflation and employment data closely because the path to further easing remains uncertain. #FederalReserve #MacroEconomics #RateCut [1] [2] [3] [4]

The US Economy is treading a narrow path with risks lying on both sides of the path The US Federal Reserve just cut interest rates, but it doesn't actually solve anything. It’s more of a "risk management" move to support a weakening jobs market. Here’s a quick look at the latest numbers: * Rates: The Fed cut to a range of 4.0% to 4.25%. * GDP: Growth was 3.3% in Q2, but driven by a non-sustainable drop in imports, masking a decline in investment. * Unemployment: Rose to 4.3% in August, with job creation stalling at just +22,000 nonfarm payrolls. * Inflation: Both CPI (2.9%) and the Fed’s preferred Core PCE (2.9%) are still running well above the 2% target, with tariffs fueling persistent price pressures. This confluence of slowing growth and sticky inflation creates the perfect conditions for a stagflationary environment. The Fed is caught in a policy dilemma, and its actions alone may not be enough to avert a deeper economic challenge. Investors and businesses should prepare for a period of heightened uncertainty and volatility. #economy #stagflation #GDP

Markets agree that more Fed rate cuts are coming – but not on why. After the Fed’s recent rate cut, both equity and bond markets expect more cuts ahead. 👉 Equities see cuts as fuel for a resilient economy that could even reaccelerate into 2026, boosted by fiscal stimulus. 👉 Bonds interpret them as a response to a weakening job market and potential cracks in employment data. This split means upcoming economic data (like next week’s employment report) will carry outsized weight, as each side looks for confirmation. Data source: FRED #LCKInsights #Markets #Investing #InterestRates #USEconomy