Fed Powell delivers a speech on the economic outlook

ECB'S CIPOLLONE: IF DIGITAL EURO LEGISLATION IS NOT IN PLACE IN THE SECOND QUARTER, IT WILL BE IN THE THIRD QUARTER MIDDLE OF 2029 WOULD BE FAIR ASSESSMENT FOR POSSIBLE DIGITAL EURO LAUNCH

Thank you. It is a pleasure to be back here in Rhode Island. The last time I had the opportunity to speak to the Greater Providence Chamber of Commerce was in the fall of 2019. I noted then that, "if the outlook changes materially, policy will change as well." Little did any of us know! Just a couple of months later, the COVID-19 pandemic arrived. Both the economy and our policy evolved dramatically in ways no one could have predicted. Along with actions by Congress, the Administration, and the private sector, the Fed's aggressive response helped stave off historically severe downside risks to the economy. The COVID pandemic came on the heels of the painfully slow decade-long recovery from the Global Financial Crisis. These two back-to-back world historical crises have left behind scars that will be with us for a long time. In democracies around the world, public trust in economic and political institutions has been challenged. Those of us who are in public service at this time need to focus tightly on carrying out our critical missions to the best of our ability in the midst of stormy seas and powerful crosswinds. Throughout this turbulent period, central banks like the Fed have had to develop innovative new policies that were designed to deliver on our statutory goals during times of crisis, rather than for everyday use. Despite these two unique, extremely large shocks, the U.S. economy has performed as well or better than other large, advanced economies around the world. As always, it is essential that we continue to look back and learn the right lessons from these difficult years, and that process has been ongoing for more than a decade. Turning to the present day, the U.S. economy is showing resilience in the midst of substantial changes in trade and immigration policies, as well as in fiscal, regulatory and geopolitical arenas. These policies are still emerging, and their longer-term implications will take some time to be seen. Economic Outlook *POWELL: UNCERTAINTY OVER INFLATION’S PATH REMAINS HIGH FED CHAIR POWELL: DOWNSIDE RISKS TO EMPLOYMENT SHIFTED BALANCE OF RISKS, PROMPTING LAST WEEK'S RATE CUT POWELL: RATE CUT WAS ANOTHER STEP TOWARD A MORE NEUTRAL POLICY STANCE FED’S POWELL REITERATES THERE IS NO RISK-FREE POLICY PATH AHEAD Fed's Powell: Reasonable base case is that tariff-driven inflation effects will be relatively short-lived. Powell Says Policy Is Still Slightly Restrictive And Ready To Change If Needed

POWELL: BEIGE BOOK SHOWED MODEST GROWTH, ECONOMY GROWING BUT NOT FAST *POWELL: CAN'T REALLY SAY LABOR MARKET IS SOLID ANYMORE Fed's Powell: Towards next meeting will look at labor market, growth data, inflation data to ask if policy in right place. If policy is not in right place, we'll move it there. Fed's Powell: Banks are well-capitalized and households are in good shape. Powell States That Companies Are Holding Back On Hiring To Observe The Impact Of Policies

POWELL: IT LOOKS LIKE MIDDLE GROUP ABSORBING TARIFFS, NOT PASSING MUCH ON TO CONSUMERS Fed's Powell: The pass-through to consumers has been later and less than we expected.