Insights

Federal Reserve Chair Jerome Powell recently highlighted a stable U.S . economic outlook despite uncertainty, citing progress toward the Fed's dual-mandate goals of maximum employment and stable prices. The economy has shown resilience, with economic output growing over 3% last year and a 2.5% expansion rate this year. Key aspects of the current economic situation include ¹: - *Labor Market*: The labor market has cooled from its peak but remains solid, with the number of job openings slightly above the number of unemployed Americans seeking work. - *Inflation*: Inflation has decreased significantly from its mid-2022 peak, with total PCE prices rising 2.3% over the 12 months ending in October and core PCE prices increasing 2.8%. - *Monetary Policy*: The Fed has taken steps to reduce policy restraint, lowering the policy interest rate by 0.25% and maintaining a cautious stance amid uncertainty. Powell emphasized the importance of maintaining economic strength while returning inflation to the 2% goal. He also noted that reducing policy restraint too quickly or slowly could have unintended consequences, such as hindering progress on inflation or weakening economic activity and employment ¹. The U.S. dollar has responded positively to Powell's comments, with the DXY index climbing near 103 due to stronger-than-expected Nonfarm Payrolls data and Powell's cautious stance on monetary policy .