Fed's Paulson is 'cautiously' approaching December rate decision, she says

FED PAULSON: SHE IS APPROACHING DECEMBER RATE DECISION CAUTIOUSLY ... FED’S PAULSON SAYS MONETARY POLICY MUST WALK A FINE LINE GIVEN UPSIDE INFLATION RISKS AND DOWNSIDE EMPLOYMENT RISKS; SAYS SHE REMAINS MORE WORRIED ABOUT THE LABOR MARKET THAN INFLATION AT THE MARGIN ... FED’S PAULSON SAYS ECONOMIC BIFURCATION MAY HAVE INTENSIFIED WITH LOWER- AND MODERATE-INCOME HOUSEHOLDS STRUGGLING; ADDS THAT THE SEPTEMBER LABOR MARKET REPORT WAS ‘ENCOURAGING’ OVERALL FED’S PAULSON SAYS TARIFF EFFECTS HAVE BEEN SMALLER THAN FEARED AND OVERALL DEMAND IS HELPING CONTAIN INFLATION; SAYS GROWTH IS MORE DEPENDENT THAN USUAL ON HIGH-INCOME EARNERS AND THE OUTLOOK IS PARTICULARLY SENSITIVE TO EQUITY VALUATIONS Economic Outlook Good evening, and thank you, Joe.1 I’m thrilled to be here for my very first Field Meeting Capstone. I’ve had the pleasure of meeting some of you during my visits across the District this fall, and it’s wonderful to see some familiar faces again. For those I haven’t met yet — welcome! I’m looking forward to getting to know you in the months ahead. This year marks a special milestone. It’s the 80th anniversary of the Field Meeting series. Since I am new to the Philly Fed, I’ve been asking a lot of questions about things that other people take for granted. When I first saw the name “field meeting,” I didn’t get the connection with banking, so I did some digging. And our 1946 annual report provides a clue to the origins of these meetings. It describes the development of “a program of conferences with bankers in the field.”2

Job growth was better than expected in September with the best job gains since April, according to the delayed government report. But key data is still missing, and questions remain about the strength of the economy. That uncertainty comes as the Fed prepares to consider another rate cut. Geoff Bennett discussed more with Austan Goolsbee, president of the ...

NEW YORK FED'S WILLIAMS: FED CAN STILL CUT RATES IN THE NEAR TERM GIVEN CURRENT POLICY IS MODESTLY RESTRICTIVE WILLIAMS: INFLATION PROGRESS HAS STALLED, BUT SHOULD BE ON TRACK TO 2% IN 2027 *FED'S WILLIAMS STILL SEES ROOM FOR A NEAR-TERM RATE CUT Williams: Navigating Unpredictable Terrain Good morning. It’s a pleasure be here to celebrate the 100th anniversary of the Central Bank of Chile. The topic of my remarks today is inflation targeting, which is both an important part of Chile’s central banking history and a core foundation of successful monetary policy. Most central banks around the world have adopted inflation targeting regimes over the past 35 years, and Chile was among those leading the way. Although specifics vary across jurisdictions, these strategies share three principles: independence and accountability, transparency and the clear communication of an inflation target, and well-anchored inflation expectations, gained from the credibility that central banks build over time.1 Today I will discuss the success of inflation targeting strategies in helping central banks achieve price stability and better economic outcomes. I’ll also talk about how these strategies were critically important in managing uncertainty after the onset of the COVID-19 pandemic—and how they helped countries bring inflation down while minimizing disruptions to financial markets and economies. Fed's Williams: Tariffs adding half to three-quarter PPT to inflation