NAR US Existing-Home Sales Report Shows 0.2% Decrease in August

Thank you for the invitation to join you this morning. I appreciate the opportunity to speak with you, and I look forward to our discussion. I will spend most of my time speaking about the Fed’s role as a supervisor and regulator of the nation’s banking system, but with the recent Federal Open Market Committee meeting attracting much attention, I will first offer a few words on last week’s monetary policy decision and my thoughts on the outlook for policy going forward. As I am sure you are all aware, the FOMC lowered its target policy rate by 25 basis points last week. I supported this decision. Let me explain my thinking. In setting policy, I, like other members of the FOMC, am guided by the Fed’s congressionally determined dual mandate of price stability and full employment. Currently, we are close to meeting this mandate, and as close as we have been for some time. Inflation is running around 2½ percent, which is above but near the Fed’s 2 percent definition of price stability. Looking through the effects of declining energy prices, inflation has been closer to 3 percent. The unemployment rate in August was 4.3 percen *SCHMID: INFLATION REMAINS TOO HIGH, LABOR MKT. STILL IN BALANCE *FED'S SCHMID SAYS LABOR MARKET SHOWED RISK OF ABRUPT WEAKENING *SCHMID: QUARTER-POINT CUT WAS REASONABLE RISK-MANAGEMENT MOVE Fed's Schmid: Fed policy is slightly restrictive; which is the right place to be. Fed's Schmid: Going forward will be data-dependent on monetary policy choices

*FED'S BOWMAN SAYS LABOR MARKET MORE FRAGILE THAN EXPECTED *BOWMAN SAYS FED IS WITHIN RANGE OF FED 2% INFLATION TARGET *BOWMAN SAYS APPROPRIATE TO SHIFT TO JOBS INSTEAD OF INFLATION BOWMAN SAYS TARIFFS WILL HAVE ONE-TIME PRICE IMPACT - Fed's Bowman indicates foreign suppliers are absorbing some tariff costs - This could influence trade dynamics and pricing strategies - Market watchers should keep an eye on the implications for U.S. trade relations