Powell: Doesn't feel like a hot economy

*POWELL: GRADUAL LABOR MARKET COOLING JUSTIFIED RATE CUT TODAY Fed's Powell: We think there's a negative 20,000 in payrolls per month. ?*POWELL: WE THINK JOB GAINS OVERSTATED BY 60K IN RECENT MONTHS Fed's Powell: Evidence is growing that services inflation has come down, and goods inflation is entirely due to tariffs. Fed's Powell: Inflation has come in a touch lower.

POWELL: SOME PEOPLE FEEL WE SHOULD STOP HERE AND WAIT FED POWELL: SOME THINK WE SHOULD PAUSE AND WAIT, WHILE OTHERS THINK WE SHOULD CUT ONCE OR MORE. Fed's Powell: The unemployment rate may only tick up one, two more tenths. Fed's Powell: Don't expect a sharper downturn in employment with rates in a plausible range of neutral. Fed's Powell: We have made progress this year in non-tariff related inflation.

POWELL: EFFECTS OF RATE CUTS SO FAR ONLY BEGINING TO BE COMING IN Fed's Powell: We will need to be careful assessing household jobs data. FED POWELL: DATA WAS NOT COLLECTED IN OCT AND HALF OF NOV, SO THE FED WILL LOOK AT IT WITH A SKEPTICAL EYE, INCLUDING CPI AND HOUSEHOLD SURVEYS, WHICH MAY BE DISTORTED BY TECHNICAL FACTORS. POWELL: I COULD MAKE THE CASE FOR EITHER SIDE POWELL: IT'S A CLOSE CALL POWELL: ONE TOOL CAN'T DO TWO THINGS AT ONCE POWELL: IT'S A CHALLENGING SITUATION POWELL: I DON'T THINK A RATE HIKE IS ANYONE'S BASE CASE

POWELL: HAVENT MADE A DECISION ON JANUARY Fed's Powell: We're now in the high end of the range for neutral. Fed's Powell: If no new tariff announcements, inflation from goods should peak in Q1. Fed's Powell: From here, the peak should be a couple of tenths higher, or less, on inflation. Fed's Powell: Inflation compensation at very comfortable levels.

POWELL: RISE IN LONG RATES MAY BE DUE TO EXPECTATIONS FOR HIGHER GROWTH Fed's Powell: Nothing happening in long rates that suggests concern about inflation in the long run. POWELL: WE HEAR LOUD AND CLEAR HOW PEOPLE ARE EXPERIENCING HIGHER COSTS Fed's Powell: Will need to have some years where wages outpace inflation for people to feel good about affordability. POWELL: WE WILL DELIVER 2% INFLATION

*POWELL: LABOR MARKET SEEMS TO HAVE SIGNIFICANT DOWNSIDE RISKS POWELL: IF YOU GET AWAY FROM TARIFFS INFLATION IS IN THE LOW 2S POWELL: TARIFFS ARE LIKELY TO BE ONE-TIME PRICE INCREASES Fed's Powell: If we didn't have to worry about the labour market, the policy rate would be higher Fed's Powell: labour supply has also come down sharply.