"We believe the current attitude policy is likely to remain appropriate as long as incoming information remains broadly in line with our outlook."
Powell says the Fed is unlikely to make further interest rate cuts in the near future unless something really bad affects the economy. Although he was not too specific about what could lead to the central bank taking action, he did say that the Fed expects the economy to grow by about 2 percent, suggesting that if the pace goes slower than that, policy makers would step in.
"Politics is not a preset course."
The Fed is trying to give the financial markets and the public as much warning about what it will do with interest rates, but it can & # 39; Don't reliably predict the move beyond the next meeting because financial data can shift quickly. This means that while the Fed currently expects rates to remain stable in December, it is not a firm commitment if major developments change the outlook for the economy.
"We have the potential Phase 1
agreement with China, which, if signed and implemented, could have the effect of reducing trade tensions and reducing uncertainty, and that would be good for business confidence."  The Fed chief cited Trump's preliminary trade agreement with China as one of the bright spots in the economy and a major reason why the central bank decides to press the pause button for several cuts. Given that many economic fundamentals unrelated to trade remain healthy, the Fed doesn't want to give up too much of its firepower to fight a recession until we actually have one. Some economists say it could happen next year, when the election campaign really starts to heat up.
Here Powell emphasizes that trade tensions, along with slowing growth in other countries, are the biggest factors in slowing the economy by making businesses uncertain where to invest. And if you get the consequences, it means that Trump himself can help fix the economy by resolving trade conflicts.
"The reason we raise interest rates is generally because we see inflation rising or at risk of increasing significantly, and we really don't see it now."
Here's some good news for Trump: That means the Fed sees no scenario soon where it will raise interest rates. In fact, the central bank is concerned that prices have risen too slowly; The target is 2 per cent, but inflation has been below that for a while. Thus, the central bank could keep borrowing costs low for a while, although some Fed officials worry that low interest rates can create risky bubbles by getting investors to see where they can for a higher return.
"I will maintain my long-standing practice of not commenting on anything any elected official will say."
This was Powell's response when asked about Trump's tweet today that this is "the largest economy in American history." The Fed boss has unnecessarily avoided answering the president in any way, even as Trump's tweets have often been cut and personal; he has called Powell a "bonehead", a "terrible intermediary" and "a golfer who can't cuddle" – and has hinted in the past that he would like to fire him.
But the Fed was created by Congress to be isolated from political pressure; Powell is in the middle of serving a 14-year term at the central bank and was confirmed by the Senate as Fed chairman for a four-year term – after being nominated by Trump himself.
That means Trump would face an uphill battle to try to remove Powell as Fed chief, and so Powell has instead chosen to focus on building strong relationships with lawmakers from both parties.
It seems to work: When he testified before Congress this summer, he received a warm welcome and received bipartisan praise for working to remain politically independent.