Powell: Welcoming Remarks

Ms Schnabel started her presentation by noting that since the Governing Council’s previous monetary policy meeting on 23-24 July 2025, interest rate markets in the euro area and the United States had been pulled in different directions, leading to a convergence of policy rate expectations. In the euro area, expectations for interest rates had shifted higher, with reduced uncertainty around the rate outlook, as a consensus had formed that interest rates were currently in a “good place” and close to or at the end of the monetary policy cycle. Markets had fully priced out any rate cut at the current meeting and assigned a significantly lower probability to another 25 basis point rate cut by year-end. The median participant in the ECB Survey of Monetary Analysts anticipated no further rate cuts in 2025, while the median respondent in both the Bloomberg and Reuters surveys did not expect any further rate cut in the current cycle. In the United States, market expectations of a quicker easing cycle had increased after weak labour market data. As a result, the gap between the one-year rate one year ahead in the euro area and the United States had narrowed to its lowest level since September 2024. ECB ACCOUNTS: NO IMMEDIATE PRESSURE TO CHANGE POLICY RATES AT THE CURRENT MEETING THE ENVIRONMENT REMAINED MORE UNCERTAIN THAN USUAL THE CURRENT SITUATION WAS LIKELY TO CHANGE MATERIALLY AT SOME POINT THERE CONTINUED TO BE A HIGH OPTION VALUE TO WAITING FOR MORE INFORMATION.… ECB's Lane proposed no rate change, as opposed to a cut ECB'S SCHNABEL SAW RISK OF SUDDEN, SHARP MARKET CORRECTIONS

Good morning, everyone and welcome. It's a privilege to be here today at the Federal Reserve Board with so many of our nation's community bank CEOs. I want to start by thanking our bankers for the essential work you do every day—serving your communities, supporting small businesses and families and keeping local economies strong and growing. Today's event provides us an opportunity to come together and discuss the future of community banking. This great nation hosts the largest and most effective financial system in the world, ensuring that capital flows to those who need it and can put it to productive use. I think of community banks as the foundation of our financial system. You are often the first call for small businesses seeking to grow, for families looking to buy homes, and for anyone seeking to achieve their financial goals. At a time of rapid technological change, a shifting regulatory landscape, and evolving consumer expectations, your work has never been more vital or more challenging. Fed Official Bowman Does Not Discuss Monetary Policy Or Economic Outlook During Community Bank Conference Welcome Speech

BESSENT: WILL RELEASE TREASURY BUDGET STMT AFTER SHUTDOWN ENDS US Treasury Sec Bessent Touts Drop In US Deficit-To-GDP Ratio For FY 25’ - Cites CBO Estimate Of Fiscal Year ’25 Federal Deficits - Will Release Trsy Budget STMT After Shutdown Ends US TSY'S BESSENT Q&A: PRIVATE CREDIT CAN BE 'VERY PRO-CYCLICAL, EXACERBATING DOWNTURNS;' PRIVATE CREDIT USEFUL, SHOULDN'T DISADVANTAGE REGULATED BANKS #Bessent #USTreasury #economy #banking Bessent States That Regulatory Rules Are 'Too Tight'