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At its November meeting, the Federal Open Market Committee reduced the target for its benchmark interest rate, the federal funds rate, by a quarter percentage point—to a range of 4-1/2 to 4-3/4 percent. That came after we lowered the policy rate by a half percentage point in September, so it has come down three-quarters of a percentage point, or 75 basis points, from its high. I voted for both moves because I believe inflation remains on a path, albeit a bumpy one, toward the Committee's objective of 2 percent, per the personal consumption expenditures (PCE) price index. The risks to achieving the Committee's dual mandates of maximum employment and price stability have shifted such that they are roughly in balance, so we likewise should begin shifting monetary policy toward a stance that neither stimulates nor restrains economic activity. Conditions on both sides of the Fed's mandate—price stability and maximum employment—appear to be broadly healthy. Nevertheless, a continuation of the positive string of macroeconomic developments is not assured. Uncertainties persist on various fronts and risks loom both for the health of the labor market and price stability. As always, I am paying close attention to all the risks and uncertainties. Which way forward for labor markets? post: BOSTIC: DO NOT WANT PEOPLE FOCUSED ON THE VIEW THAT THERE MUST BE A CUT AT EVERY MEETING post: BOSTIC SAYS HE HAS NOT YET DECIDED ON PACE, EXTENT OF CUTS FOR 2025 post: FED’S BOSTIC: BASE CASE IS THAT INFLATION REMAINS ON TRACK TO REACH 2% post: BOSTIC: DO NOT BELIEVE PROGRESS ON INFLATION HAS STALLED, THOUGH IT HAS BEEN BUMPY

Thank you, Lydia, and thank you for the opportunity to speak to you today. I thought I might use my time with you to address the Federal Open Market Committee's (FOMC) ongoing effort to return inflation to our 2 percent target while keeping the labor market and the economy strong. After significant progress in reducing inflation and evident moderation in the labor market, in September the Committee judged that the time had come to begin easing monetary policy toward a more neutral setting to limit the risk of unduly weakening the labor market as progress continues toward 2 percent inflation. After reducing the policy rate 75 basis points since our September meeting, I believe that monetary policy is still restrictive and putting downward pressure on inflation without creating undesirable weakness in the labor market. I expect rate cuts to continue over the next year until we approach a more neutral setting of the policy rate. But recent data have raised the possibility that progress on inflation may be stalling at a level meaningfully above 2 percent. This risk has raised concerns that the FOMC should consider holding the policy rate constant at our upcoming meeting to collect more information about the future path of inflation and the economy. Based on the economic data in hand today and forecasts that show that inflation will continue on its downward path to 2 percent over the medium term, at present I lean toward supporting a cut to the policy rate at our December meeting. But that decision will depend on whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation. Let me turn to the economic outlook. Real gross domestic product (GDP) grew at a strong annual pace of 2.8 percent in the third quarter of 2024, and indications are that growth in the fourth quarter will be a bit slower. An average of private sectors forecasts predicts 2.2 percent, while based on fairly limited data so far, the Atlanta Fed’s GDPNow model currently predicts 3.2 percent. On the consumer side of the economy, real personal consumption expenditures (PCE) increased 0.1 percent in October after a 0.5 percent rise in September. Given the recent volatility in these numbers, I won't read too much into the monthly swing. The modest increase in October might partially reflect some payback to the stronger growth in September. Overall, household balance sheets continue to be in generally good shape, and this position should help maintain spending going forward. post: Fed’s Waller Says Leaning Towards Rate Cut In December, Absent Data Surprise https://t.co/iyPgiSmydc post: Waller: “At present, I lean toward supporting a cut to the policy rate at our December meeting.” Because of recent inflation stickiness, “one could argue that there is a case for skipping a rate cut at the next meeting.” But … “policy is still restrictive enough that an… post: FED'S WALLER: I AM LESS PLEASED ABOUT UPTICK IN INFLATION, BUT DON'T WANT TO OVERREACT. post: FED'S WALLER/AIER: DON'T KNOW IF INFLATION UPTICK WILL PERSIST AND LABOR DATA 'CLOUDY' SO DATA COULD ARGUE AGAINST A DEC CUT #Waller #FederalReserve