Fed’s Powell: Notes inflation excluding tariff effects is not far from the 2% target

*POWELL: DON'T KNOW WHAT DATA WE'LL GET BEFORE DECEMBER FOMC *POWELL: STRONGLY DIFFERING VIEWS WERE REALLY ABOUT THE FUTURE *POWELL: LABOR MARKET IS NOT CLEARLY DECLINING QUICKLY *POWELL: RESERVE DECLINE WILL HAPPEN, BUT NOT FOR LONG TIME *POWELL: FED WILL BE ADDING RESERVES AGAIN AT A CERTAIN POINT FED’S POWELL: FED PORTFOLIO CURRENTLY HAS MORE DURATION THAN OUTSTANDING TREASURY STOCK; AIMS TO SHIFT BALANCE SHEET TOWARD SHORTER-DURATION ASSETS, WITH ENDPOINT YET TO BE DECIDED *POWELL: SEPTEMBER CPI WAS A LITTLE SOFTER THAN EXPECTED *POWELL: NON-HOUSING SERVICES INFLATION HAS BEEN MOVING SIDEWAYS

Fed's Powell: If we see data labour market is stabilizing, or strengthening, it would play into policy decisions. Fed's Powell: Not seeing an uptick in claims, or a downtick in openings, suggests gradual cooling, gives some comfort. FED’S POWELL: IF THERE WERE A SIGNIFICANT CHANGE IN THE ECONOMY, WE WOULD LIKELY DETECT IT Fed's Powell: If there is a high level of uncertainty, that could be an argument for caution on moving. Fed's Powell: For today's rate cut, a strong, solid vote, and the strongly differing views were really about the future.

Fed's Powell: Tension between two goals, and strong views across committee. *POWELL: FED HAS NOT MADE A DECISION ABOUT DECEMBER MEETING FED’S POWELL: TODAY’S RATE CUT WAS A RISK-MANAGEMENT MOVE; DECISIONS GOING FORWARD WILL BE A DIFFERENT MATTER Fed's Powell: We can't address both employment, inflation risks with our one tool. FED’S POWELL: NOTES TIGHTENING IN MONEY MARKETS OVER THE PAST THREE WEEKS; ASSESSES RESERVES AS ONLY SLIGHTLY ABOVE AMPLE AND SEES LITTLE BENEFIT IN FURTHER BALANCE SHEET REDUCTION

FED’S POWELL: ABSOLUTELY COMMITTED TO BRINGING INFLATION BACK TO 2%; SAYS THE FED’S COMMITMENT IS CREDIBLE AND FIRM POWELL: DON'T THINK WE'LL HAVE A VERY GRANULAR UNDERSTANDING OF ECONOMY WHILE SHUTDOWN IS ON Fed's Powell: Could imagine shutdown could affect December meeting. FED’S POWELL: ACKNOWLEDGES POSSIBILITY OF NEEDING MORE CAUTION IN THE ABSENCE OF DATA, THOUGH NOT COMMITTING TO SLOWING DOWN — SAYS SUCH A SCENARIO IS IMAGINABLE POWELL: MUCH OF THE TIME THE LAYOFFS ARE ABOUT AI; YES IT COULD HAVE IMPLICATIONS FOR JOB CREATION

POWELL: WE'VE MOVED 150 BASIS POINTS, NOW IN RANGE WHERE MANY ESTIMATES OF NEUTRAL RATE LIVE POWELL: SOME PEOPLE ON COMMITTEE FEEL IT'S TIME TO TAKE A STEP BACK FED’S POWELL: SOME MEMBERS OF THE COMMITTEE BELIEVE IT’S TIME TO TAKE A STEP BACK; NOTES LABOR MARKET IS A MORE RELIABLE INDICATOR THAN SPENDING, WHICH IS CURRENTLY SHOWING A MORE DOWNBEAT SIGNAL *POWELL: GROWING CHORUS FEELS LIKE MAYBE FED SHOULD WAIT A CYCLE FED’S POWELL: YOU SAW THAT SENTIMENT IN SEPTEMBER AND IN RECENT REMARKS, AND CAN EXPECT IT TO BE REFLECTED IN THE MINUTES FROM TODAY’S MEETING

*POWELL: DRAMATIC REDUCTION IN LABOR SUPPLY AFFECTING JOB MARKET Fed's Powell: Demand for workers has fallen a little more than supply, and our tool supports demand. FED’S POWELL: RATES ARE NO LONGER ACCOMMODATIVE BUT ARE MEANINGFULLY LESS TIGHT THAN BEFORE, WHICH SHOULD HELP PREVENT FURTHER WEAKENING IN THE LABOR MARKET POWELL: IT TAKES A WHILE FOR TARIFFS TO GET TO CONSUMERS POWELL: COULD GET 2 OR 3 OR 4 MORE TENTHS OF INFLATION FROM TARIFFS, BUT SHOULD BE ONE-TIME