Fed’s Powell: Absolutely committed to bringing inflation back to 2%; says the Fed’s commitment is credible and firm

FED’S POWELL: DOESN’T PLACE MUCH WEIGHT ON NON-MARKET SERVICES DATA; NOTES INFLATION EXCLUDING TARIFF EFFECTS IS NOT FAR FROM THE 2% TARGET FED’S POWELL: ESTIMATES INFLATION MAY BE ABOUT 0.5 TO 0.6 PERCENTAGE POINTS ABOVE TARGET; DOES NOT SEE LABOR MARKET OR INFLATION EXPECTATIONS TIGHTENING IN A WAY THAT WOULD MAKE INFLATION MORE PERSISTENT FED’S POWELL: NOT ASSUMING TARIFF-DRIVEN INFLATION WILL BE ONE-TIME; SAYS FED IS MONITORING DEVELOPMENTS CLOSELY FED’S POWELL: POLICY STANCE IS MODESTLY RESTRICTIVE, WHICH IS CONTRIBUTING TO THE LABOR MARKET’S GRADUAL COOLING POWELL: DATA CENTER INVESTMENTS AND AI IS A BIG DEAL

*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.

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

*POWELL: FED DOESN'T LOOK AT ANY ONE ASSET PRICE, SAY IT'S WRONG *POWELL: IN AGGREGATE, HOUSEHOLDS ARE IN GOOD SHAPE FINANCIALLY FED’S POWELL: DOESN’T SEE EXCESSIVE LEVERAGE IN THE BANKING OR FINANCIAL SYSTEM; DESCRIBES THE SITUATION AS MIXED BUT NOT OVERLY TROUBLING FED’S POWELL: OVERALL ECONOMIC OUTLOOK NOT OVERLY TROUBLING; NOTES INTEREST RATES AREN’T A MAJOR FACTOR IN DATA CENTER INVESTMENT, BUT LOWER RATES WILL MARGINALLY SUPPORT DEMAND AND HIRING FED’S POWELL: UNLIKE THE DOT-COM ERA WHEN MANY WERE JUST IDEAS, TODAY’S COMPANIES HAVE REAL EARNINGS AND PROFITS — THIS IS NOT THE SAME KIND OF BUBBLE FED’S POWELL: CONSUMER SPENDING HAS BEEN A MAJOR SUPPORT FOR THE ECONOMY AND REMAINS A BIG DRIVER OF ACTIVITY; NOTES CONSUMER SPENDING PLAYS A MUCH LARGER ROLE THAN AI IN OVERALL ECONOMIC GROWTH