US Treasury Auction Results

Fed's Miran: Fed policy is too restrictive.

*TRUMP ADMIN. BACKS BILL ENDING SHUTDOWN, SAYS TRUMP WOULD SIGN

*BOSTIC: MOVING POLICY LOWER RISKS FEEDING 'INFLATION BEAST' *BOSTIC: LABOR MARKET SHIFTING BUT NOT CLEARLY WEAKENING *BOSTIC: PRICE STABILITY STILL CLEARER, URGENT RISK FACING FED Weighing the Risks: Why Inflation Tips the Scales Thank you for inviting me to be with you. I especially enjoyed the short trip to the venue. At the Atlanta Fed, we are honored to serve as regular host to the Atlanta Economics Club monthly meetings. My staff and I appreciate the work you do to advance the understanding and practice of economics. Before I dive into my remarks, let me remind you that these thoughts are mine and do not necessarily reflect the views of my colleagues on the Federal Open Market Committee (FOMC) or at the Atlanta Fed. Today, I will detail my economic and monetary policy outlook through the lens of the objectives Congress assigned the Federal Reserve: price stability and sustainable maximum employment. Let me set the stage by sharing that I believe that risks to both of the mandated objectives make this the most challenging environment since I became a central banker in 2017. In this moment, we face the difficult circumstances of softening labor market conditions while inflation remains materially above the FOMC's stated 2 percent objective. The unwelcome implication is that reductions in interest rates that normally would mitigate risks to the employment mandate could heighten the risks to the price stability mandate. And vice versa: maintaining moderately restrictive monetary policy, the typical tool in battling inflation, raises the risks to the employment mandate. The job of an FOMC participant is to confront this tension and weigh the trade-offs inherent in determining the appropriate setting for monetary policy. Right now, it is an extremely close call. But I'm going to detail my case that, despite shifts in the labor market, the clearer and urgent risk is still price stability. Let me preface the meat of my talk by noting that we've missed some data releases because of the federal government shutdown. We are not flying blind, however, and I'll discuss some of the alternative information sources guiding my policy thinking right now. Fed's Bostic: I do not view a severe labor market downturn as the most likely near-term outcome.

MIRAN: SHOULD NOT TAKE INFLATION DATA AS FACE VALUE Fed's Miran: Elevated inflation is due mainly to the measurement process. Fed's Miran: I am in favour of using the Fed's balance sheet more judiciously than it has in the past. MIRAN: QE MAYBE WAS 'OVER-USED' IN PAST

Governing Council members began their deliberations by discussing global economic developments since the July Monetary Policy Report. The impact of US protectionism on major economies around the world had become clearer. Trade flows had begun to shift, and ongoing trade uncertainty had weighed on investment in most advanced economies. Even so, global growth was resilient but was expected to slow over the next two years. Economic growth in the United States remained strong even with higher tariffs on imports. Members attributed much of this strength to the boom in artificial intelligence (AI) investment. US consumer spending was robust overall, contributing to this strength. Consumption was likely supported by segments of the population who have benefited from buoyant equity markets. Employment growth had slowed, and tariffs were beginning to push up US consumer prices. After growth in US gross domestic product (GDP) rebounded in the second quarter of 2025, members expected it to moderate in the second half of the year and in 2026. Growth in the euro area was expected to moderate in the second half of 2025 because of weaker exports and slower domestic demand growth. Fiscal spending on defence and infrastructure could provide some support going forward. In China, growth was robust, boosted by strong government support for households and an increase in exports to other (non-US) countries, replacing lost exports to the United States. However, a sharp decline in investment was expected to contribute to slightly slower growth over the next two years. Members noted that slower-than-expected GDP growth in China could translate into weaker demand and lower prices for raw materials exported by Canada. BoC: Members expressed concern that weakness in the labour force could persist and broaden - Minutes. BoC: Members had a range of views about the timing of the cut but arguments for a move in October were considered more important - Minutes. BoC Meeting Minutes: Some members felt waiting would provide them with more information about economy, jobs and inflation.