Tag: Jerome Powell

Jerome Powell Says US Job Creation Near Zero as Fed Signals Steady Unemployment
Job creation in the US has slowed to essentially zero, Federal Reserve Chair Jerome Powell said Wednesday as the Fed released its latest economic projections, which included slightly higher economic growth than previously projected and little change to the unemployment rate.
Altogether, Powell said, central bankers see “a degree of stability” in the labor market.
“But the thing that I think a good number of people on the committee are concerned about is just the very, very low level of job creation,” Powell said in a press conference following the Fed’s decision to hold interest rates steady.
“Effectively, there’s zero net job creation in the private sector,” after accounting for revisions over the past six months, Powell said. “But actually, that looks like that’s about what the economy needs, in terms of dealing with very, very low — nonexistent, really — growth in the labor force, which of course we’ve never had in our history.”
Indeed, the country may not need as many jobs as it once did amid lower labor force participation rates and immigration declines. But Powell also noted that “labor demand has clearly softened as well.”
The job market hasn’t shifted dramatically since Powell’s last press conference in late January. But whatever brief glimmers of optimism existed are now in doubt. The unemployment rate, now at 4.4%, ticked back up in February as the economy shed 92,000 jobs, while December and January’s job gains were revised lower by 69,000, meaning there’s been barely any job growth in three months.
In their new policy statement, Fed officials removed language that noted the “unemployment rate has shown some signs of stabilization,” saying instead that “job gains have remained low, and the unemployment rate has been little changed in recent months.”
March 19, 2026
Trump Has a New Opportunity to Influence the Federal Reserve
In an unfolding drama at the intersection of politics and economics, former President Donald Trump is poised to gain new influence over U.S. monetary policy. The early resignation of Fed Governor Adriana Kugler, a Biden appointee, has opened a vacancy on the Federal Reserve’s Board of Governors—just as markets are betting on a looming interest rate cut following weak labor data.
If reelected, Trump would have the opportunity to fill that seat—and later, Fed Chair Jerome Powell’s position in 2026—giving him a powerful lever to shape monetary policy, especially amid rising demand for rate relief.
Adriana Kugler resigned effective August 8, nearly 17 months before her term was set to end in January 2026. Until now, her departure marks the first vacancy on the seven-member Fed board under Trump’s second term. Her exit presents Trump with immediate appointment power, allowing him to put a likely rate-cut advocate in place well before the September rate decision.
Kugler’s early departure—unexpected for many political watchers—provides a rare opportunity amid increasingly charged discussions around Fed independence and political influence over interest rate decisions.
On August 1, the July jobs report disappointed across the board: just 73,000 jobs added vs. expectations of ~110,000, and May/June revisions that cut 258,000 jobs combined. Unemployment ticked up to 4.2%, with labor participation falling further.
The fallout was immediate: markets sharply increased the odds of a September Fed rate cut:
According to CME FedWatch, cut odds jumped from 63.3% to 75.5%, then to about 88.2%, although Powell’s hawkish remarks later pulled them back somewhat. Inflation, however, remains above the Fed’s 2% target—with headline PCE at 2.6% and core PCE at 2.8% in June—temper market enthusiasm for a cut.
At the most recent FOMC meeting, the Fed opted to hold rates at 4.25–4.50% for the fifth consecutive time. Chair Jerome Powell asserted the labor market was “broadly in balance”, but reiterated that persistent inflation and tariffs remain risks. These comments were interpreted as relatively hawkish—a stance that reduced cut odds temporarily.
Still, the economic slowdown has emboldened voices like Atlanta Fed President Rafael Bostic and dissenter Christopher Waller, who support earlier easing, arguing the labor market impact is mounting.
Trump continues to intensify pressure on Powell, calling him “too late” on rate cuts and firing criticism at the Fed’s approach.
With the vacant seat, and several others looming in the next two years (including Powell’s chairmanship in May 2026), Trump may swiftly shape the Fed’s leadership. He has already narrowed his list of potential Fed chairs to four, including Kevin Hassett and Kevin Warsh, both aligned with his earlier economic views.
Politico reports suggest Trump will avoid nominating Treasury Secretary Scott Bessent as Fed chair, favoring loyalists instead.
Financial analysts caution: while Trump may not remove Powell mid-term, he could appoint a new governor now and a new chair later—creating a slow-motion shift at the institution’s helm.
While markets rejoice at rate cut possibilities, economists warn premature easing could undermine inflation control. Bank of America and Morgan Stanley maintain that the Fed may stay on hold until 2026, pointing to strong labor metrics, rebounding consumer spending, and structural inflation risks tied to tariffs and demographics.
Meanwhile, President Trump’s dismissal of the Bureau of Labor Statistics director, accused of manipulating data without evidence, has further spooked investors about the integrity of economic reporting—a move criticized for politicizing critical statistical institutions.
Market Expectations: Futures markets have priced in nearly a 90% chance of a 25 bps cut in September, with the potential for additional reductions totaling 60 bps by year-end.
Monetary Independence at Risk: Trump’s ability to appoint new governors—including a future Chair—raises concerns about political influence over the Fed.
Economic Impact: Rate cuts would ease borrowing costs, boost equities (especially tech and growth stocks), and potentially weaken the dollar.
Long-Term Policy Direction: A Trump-aligned Fed could steer toward looser monetary policy—even in the face of inflation risks.
A rare vacancy on the Fed board—coupled with surging rate cut expectations—has given President Trump an opening to reshape U.S. monetary policy. With chairmanship up for grabs in 2026 and growing investor pressure for interest rate relief, the Fed sits at a crossroads. Under a second Trump administration, the institution that long stood aloof from politics may find itself aligned firmly with a new partisan economic agenda.
August 5, 2025
The Federal Reserve holds interest rates stable, resisting pressure from Trump, and offers no indication of a rate cut in September
WASHINGTON – The U.S. central bank held interest rates steady on Wednesday and Federal Reserve Chair Jerome Powell’s comments after the decision undercut confidence that borrowing costs would begin to fall in September, possibly stoking the ire of President Donald Trump who has demanded immediate and steep rate relief.
Powell said the Fed is focused on controlling inflation – not on government borrowing or home mortgage costs that Trump wants lowered – and added that the risk of rising price pressures from the administration’s trade and other policies remains too high for the central bank to begin loosening its “modestly restrictive” grip on the economy until more information is collected.
While there will be two full months of data before the Fed’s September 16-17 meeting, Powell said the central bank was still in the early stages of understanding how Trump’s rewrite of import taxes and other policy changes will unfold in terms of inflation, jobs and economic growth.
“You have to think of this as still quite early days,” Powell said in a press conference after the release of the Fed’s latest policy statement. “There’s quite a lot of data coming in before the next meeting. Will it be dispositive? … It is really hard to say.”
Stock Widget
Those comments, and others that placed the burden on upcoming data to convince policymakers that lower rates were warranted, led investors to reduce the probability of a rate cut in September to less than 50%, after entering this week’s two-day Fed meeting at nearly 70%. Treasury yields rose while the S&P 500 .SPX -0.15% ▼ and Dow Jones Industrial Average .DJI -0.08% ▼ equities indexes closed marginally lower.

Powell “made clear that he thinks the Fed has room to hold the fed funds rate steady for a period of time and wait and see how much tariffs affect inflation,” said Bill Adams, chief economist at Comerica Bank, projecting that the central bank won’t cut rates until its last meeting of the year in December.
“If the unemployment rate holds steady and tariffs push up inflation, it will be hard to justify a rate cut in the next few months.”
The latest policy decision was made by a 9-2 vote, what passes for a split outcome at the consensus-driven central bank, with two Fed governors dissenting for the first time in more than 30 years.
Trump has given Powell the pejorative nickname “Too Late” for his refusal to cut rates, but the Fed chief on Wednesday said his hope was to be right on time when the decision is made to lower borrowing costs, neither moving so soon that inflation reemerges, or waiting so long that the job market slides and the unemployment rate rises. Indeed, Powell said the fact that the Fed isn’t discussing rate hikes could be seen as a willingness to overlook some of the expected impact of tariffs.
“If you move too soon, you wind up not getting inflation all the way fixed … That’s inefficient,” Powell told reporters. “If you move too late, you might do unnecessary damage to the labor market … In the end, there should be no doubt that we will do what we need to do to keep inflation controlled. Ideally, we do it efficiently.”
The data since the Fed’s June 17-18 meeting has given policymakers little reason to shift from the “wait-and-see” approach they have taken on interest rates since Trump’s January 20 inauguration raised the possibility that new import tariffs and other policy shifts could put upward pressure on prices.
Inflation is about half a percentage point above the Fed’s 2% target and has shown signs of increasing as prices of some heavily imported goods begin to rise, a process Powell said is expected to continue. As of June, Fed policymakers at the median expected inflation to rise further and end the year at about 3%.
New inflation data for June will be released on Thursday, and a key jobs report for the month of July will follow on Friday, part of the data Powell said policymakers will evaluate as they debate a possible rate cut in September.
Earlier on Wednesday, the U.S. government reported that economic growth rebounded more than expected in the second quarter, but declining imports accounted for the bulk of the improvement and domestic demand rose at its slowest pace in 2-1/2 years.
A line chart showing the benchmark interest rate set by the Federal Open Market Committee
‘THOUGHTFULLY ARGUED’
Along with Powell’s comments, the Fed’s new policy statement also gave little hint that rates were likely to fall soon, particularly with an unemployment rate that has stabilized around 4% as weaker hiring trends are offset by slowing growth in the labor force due to Trump’s immigration policies.
“The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated,” the central bank said after voting to keep its benchmark overnight interest rate steady in the 4.25%-4.50% range for the fifth consecutive meeting.
The two dissents came from Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, who has been mentioned as a possible nominee to replace Powell when the Fed chief’s term expires next May. Bowman and Waller, both appointed to the board by Trump, “preferred to lower the target range for the federal funds rate by one quarter of a percentage point at this meeting,” the Fed’s policy statement said.
Powell characterized their opposition to the policy decision as part of a debate that was “argued, very thoughtfully … all around the table,” but with a majority of policymakers still reluctant to cut rates without more inflation data in hand.
A bipartisan figure who was appointed to the Fed’s board by former President Barack Obama and later promoted to the top job by Trump, Powell voted to hold rates steady, as did three other governors and the five Fed regional bank presidents who currently hold a vote on the FOMC. The Fed’s regional bank presidents are hired by local boards of directors who oversee the Fed’s 12 regional institutions.
Governor Adriana Kugler was absent and did not vote.
Dissenting members of the FOMC often release statements explaining their vote on the Friday following Fed meetings.
July 31, 2025
Federal Reserve Holds Rates Steady; Two Officials Dissent, Preferring a Cut
President Trump with Jerome Powell after nominating him as chair in 2017. © Drew Angerer/Getty Images North America
WASHINGTON, D.C. — The Federal Reserve held interest rates steady Wednesday for the fifth consecutive meeting, but signs of growing division within the central bank emerged as two officials dissented in favor of a rate cut, underscoring increasing uncertainty over the path forward amid rising geopolitical tensions and trade policy concerns.
The Federal Open Market Committee (FOMC) maintained its benchmark federal funds rate at a range of 5.25% to 5.50%, the highest level in over two decades. But for the first time in over a year, the vote was not unanimous: Dallas Fed President Lori Logan and Chicago Fed President Austan Goolsbee broke ranks, citing growing risks from weakening consumer demand and escalating tariffs on Chinese and European imports.
“The labor market remains strong and inflation has eased notably,” the Fed said in its statement. “However, the Committee remains highly attentive to inflation risks.” Yet the statement notably softened language about future tightening, opening the door to potential rate cuts if economic conditions deteriorate.
The dual dissents highlight what analysts are calling a “fraying consensus” inside the Fed, as policymakers weigh competing risks: on one hand, stubborn core inflation that has remained above the Fed’s 2% target, and on the other, a slowing economy compounded by new import tariffs that could dampen spending and business investment.
“These are not just marginal disagreements,” said Dana Peterson, chief economist at The Conference Board. “This is a fundamental debate over how much tariffs will drive inflation versus how much they will hurt growth. The balance is tricky.”
In recent weeks, the Biden administration has rolled out a fresh wave of trade penalties on strategic imports from China—particularly in EVs, solar panels, and critical minerals—and hinted at potential levies on select European goods. While designed to bolster domestic industry, the tariffs are expected to raise input costs for manufacturers and consumers.
Data released earlier this month showed that second-quarter GDP grew at a modest annualized rate of 1.2%, a deceleration from the 1.9% seen in Q1. Meanwhile, the Fed’s preferred inflation measure—the core personal consumption expenditures (PCE) index—was flat in June, holding at 2.8% year-over-year.
Although inflation has cooled significantly from its 2022 peak, officials remain divided over whether it has moderated enough to justify rate reductions. “The Fed is walking a tightrope,” said Sarah House, a senior economist at Wells Fargo. “They want to support growth, but they don’t want to repeat the mistakes of the 1970s by cutting too soon.”
Chair Jerome Powell, speaking at a press conference following the decision, emphasized that the Fed remains data-dependent but acknowledged that the case for rate cuts is growing stronger.
“If we see more evidence that inflation is moving sustainably toward 2%, and if labor market conditions continue to evolve gradually, then a policy adjustment would be appropriate,” Powell said. “But we are not there yet.”
Markets React with Caution
Federal Funds Rate Chart
Federal-funds rate target

Note: Chart shows midpoint of target range since 2008.
Line chart showing Federal funds rate target from 2000 to 2025, ranging from 0% to 7%.

Financial markets responded cautiously to the decision. The S&P 500 closed flat, while the yield on the 10-year Treasury note dipped slightly to 4.21%. Futures markets now see a 52% chance of a rate cut at the Fed’s September meeting, up from 38% last week, according to CME FedWatch data.
Investors remain on edge over the policy outlook, with many anticipating at least one rate cut before the end of the year. But the Fed’s internal disagreements signal a more complex road ahead.
“The Fed is no longer speaking with one voice,” said Julia Coronado, a former Fed economist now at MacroPolicy Perspectives. “This is the beginning of a broader debate—not just on rates, but on how the Fed should respond to trade-driven inflation and a more fractured global economy.”
All eyes now turn to the Fed’s Jackson Hole symposium in late August, where Powell is expected to outline the central bank’s evolving approach. Analysts expect the Chair to strike a balanced tone, reaffirming inflation vigilance while acknowledging the shifting economic landscape.
“Powell will try to bring the committee back toward a unified message,” said Coronado. “But that’s harder to do when growth is slowing, inflation is sticky, and trade tensions are rising.”
As the Fed grapples with its next steps, one thing is clear: The era of near-lockstep policymaking may be giving way to a period of internal debate—and a less predictable path ahead for rates, markets, and the U.S. economy.
July 30, 2025
Why the Fed Might Keep Interest Rates Steady Until September
More than 20 times during a roughly 45-minute news conference on Wednesday, Jerome H. Powell, the chair of the Federal Reserve, referenced the idea of waiting to see how President Trump’s policies would ripple through the economy before taking any action on interest rates.
Mr. Powell, who spoke after the Fed opted to extend a pause on interest rate cuts, said the central bank had the flexibility to do so because the economy overall was still on solid footing. He also stressed that it was the most prudent decision at a time when there was so much uncertainty about how much tariffs would raise inflation and slow growth.
“It’s really not at all clear what it is we should do,” he told reporters.
Forecasts for when the Fed will restart interest rate cuts have been in a constant state of flux, whipsawing on every twist and turn in the global trade war or on any new data point that sheds a sliver more light on the state of the economy. But what is starting to set in is that the Fed may in fact be on hold for quite a bit longer than initially expected — and far longer than Mr. Trump would like. The president on Thursday again pressed Mr. Powell to lower interest rates, calling him a “fool.”
Economists are increasingly coalescing around September as the most plausible time for the Fed to restart interest rate cuts. Some have penciled in an even later start date. The longer the Fed waits, the higher the odds that officials may have to lower borrowing costs more aggressively to shore up the economy.
“The likelihood of them moving doesn’t really start to increase until you get to the September meeting,” said Tiffany Wilding, an economist at asset manager Pimco. She said a larger-than-usual half-point cut would be firmly on the table at that point and that she expects the Fed to keep lowering rates into the next year.
“I don’t think that using the playbook of 25 basis point increments per meeting for cuts is the right one to use here,” Ms. Wilding said, pointing to the possibility that the economy could weaken abruptly.
Mr. Powell on Wednesday was clear that the current backdrop was not one in which the Fed could be pre-emptive with interest rate cuts — unlike during Mr. Trump’s first-term trade war when inflation was subdued and the economy was at risk of stagnating.
That is primarily because inflation has been running above the central bank’s 2 percent target for four years, but also “because we actually don’t know what the right response to the data will be until we see more data,” Mr. Powell said.
What that means in practice is that the Fed will need to have concrete evidence in hand that the economy is languishing before feeling confident that it can lower interest rates without having to worry about stoking inflation. That could take time to show up.
“In their view, they can’t really make policy on the basis of a forecast,” said Dean Maki, chief economist for Point72, a hedge fund. “Right now, there is just too much uncertainty about where policy is going to go, about how that policy is going to ripple through the economy and about what the timing of that is.”
So far, the data the Fed has points to low layoffs and an overall solid labor market. Spending has slowed but not stalled completely. The question is how long that lasts if consumers have already turned much more downbeat about the outlook, and businesses are seeing early signs of sluggish sales and have begun to retrench.
Mr. Maki is still forecasting a July cut, but said he could envision the Fed pushing that back to September if there are not yet “significant signs” that the labor market is deteriorating. That would include rising unemployment claims and a couple of soft monthly jobs reports.
Traders in federal funds futures markets are still holding out some hope for a downshift in borrowing costs in July, after scaling back their bets for a June move on Wednesday. But there are reasons to think that the data will not have turned decisively enough in time for that.
The Trump administration is working against a July 9 deadline to mint trade deals with countries after pausing more onerous tariffs initially announced in April. On Thursday, it is set to announce its first agreement with the United Kingdom.
Top officials will also meet with their counterparts in China in Geneva, Switzerland this weekend to work toward a deal to reduce the minimum 145 percent tariffs Mr. Trump put in place on imports from the country.
White House officials are also wrangling with lawmakers to pull together a multi-trillion-dollar tax cut package by July 4.
With trade policy particularly fluid, Christopher J. Waller, a Fed governor, acknowledged last month that it was unlikely that “anything dramatic” would happen in the economic data before there was more clarity on that front.
“I don’t think you’re going to see enough happen in the real data in the next couple of months, until you get past July,” he said. The Fed will have only two more job reports in hand by the time it meets at the end of that month in addition to three inflation reports.
Much will depend on how significantly tariffs, which are a tax on imports, stoke inflation. If protectionism leads to persistently higher prices, that would have much more far-reaching consequences for the economy than a one-off spike. A lot will also depend on how consumers respond to the increase.
Ms. Wilding expects the pop in inflation from tariffs to come before any notable rise in the unemployment rate. One theory is that higher prices will cause consumers to cut back on spending, further weighing on companies’ already-strained margins. Layoffs may follow if the downshift is big enough, but they may not be the first way in which businesses try to reduce costs given the acute labor shortages most faced in the aftermath of the pandemic.
Michael Feroli, the chief economist at JPMorgan, expects the labor market to weaken enough by late summer to prompt the Fed to cut in September. Kathy Bostjancic, the chief economist at Nationwide, has also penciled in a cut then, but thinks the Fed will have to go big with a half-point reduction.
Other economists see the Fed on hold for even longer. Deutsche Bank’s team has the first cut coming in December. Larry Meyer, a former Fed governor who is now an economist at research firm LHMeyer, expects no rate cuts until 2026.
“The first thing the Fed has to do is contain inflation expectations in word or deed,” he said. “I think that means not easing this year.”
Market-based measures of inflation expectations, to which the Fed pays closest attention, suggest that inflation will indeed remain contained after jumping this year. Survey-based gauges paint a more worrying picture, a divergence that some economists say is a sign that expectations about future inflation are not as under control as officials would like.
Mr. Powell on Wednesday said there was “no cost” to the Fed waiting for now to make a policy move. The central bank was “well positioned to respond in a timely way to potential economic developments,” he said, suggesting the central bank would quickly adjust course if the circumstances changed. If the Fed saw a “significant deterioration,” Mr. Powell said, in the labor market, it would “look to be able to support that.”
He added one caveat, however: “You’d hope it wasn’t also coming at a time when inflation was getting very bad.”
May 8, 2025