Federal Reserve Chairman Jerome Powell signaled a patient and measured approach to monetary policy, emphasizing the need to distinguish meaningful economic trends from short-term fluctuations. Speaking at the 2025 U.S. Monetary Policy Forum at the University of Chicago Booth School of Business in New York, Powell highlighted the challenges posed by significant policy shifts under the new administration.
He pointed to major changes in trade, immigration, fiscal policy, and regulation, noting that their combined effect will shape the economy’s trajectory and influence the Fed’s decision-making.
- “The net effect of these policy changes that will matter for the economy and for the path of monetary policy,” he said. “Our job is to separate the signal from the noise as the outlook evolves.”
Despite uncertainty, Powell described the economy as being in a “good place,” citing steady growth, a balanced labor market, and inflation moving closer to the Fed’s 2% target.
- While risks remain, he said there is no urgency for policy adjustments. “We do not need to be in a hurry, and are well positioned to wait for greater clarity.”
He concluded by reaffirming that the Fed’s current stance is well-suited to manage risks and maintain economic stability.
- “Our current policy stance is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.”