Overview

• Powell said the outlook is little changed since September but noted a low-hiring, low-firing labor trend and that downside risks to employment have increased.
• He emphasized that recent goods-price increases largely reflect tariffs rather than broad inflation pressures, with core PCE running near 2.9%.
• A government shutdown has delayed key data such as the September jobs report, and the Fed is relying on private indicators, though CPI will still publish on Oct. 24.
• Markets are pricing a near-certain 25 bp rate cut at the late-October meeting and see strong odds of another reduction in December, aligning with prior Fed projections.
• Powell signaled the Fed may be close to ending balance-sheet runoff in the coming months and defended past asset purchases while stressing policy flexibility.