2018 Economic Calendar
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Fed Chair Press Conference  
Released On 9/26/2018 2:30:00 PM For 9/26/2018 2:30:00 PM

Highlights
Jerome Powell takes on the issue of tariffs, repeating comments in his June press conference that if the Trump administration's policies end up in lower total tariffs this would be a positive both for the U.S. and other countries. Yet if the tariff actions "inadvertently" end up in more protectionism, that he said would be unfavorable for everyone.

He did note that businesses are voicing concerns over tariffs and said there is a risk they could result in inflation. A benign outcome here would be one-time effects but an unfavorable outcome, he said, would lead to a process of rising inflation.

On inflation in general, he is stressing that the Fed is not seeing any significant pressures, that wage gains are modest and overall prices steady and near the Fed's 2 percent goal.

Concerning the administration's prior criticism of rising interest rates, Powell said Fed policy makers "don't consider political factors" in their deliberations and won't begin to.

Citing high levels of business and consumer confidence, the Fed chair said it is "a particularly bright moment" for the economy. And though noting talk of supply-side constraints including labor shortages, he said they are not yet prominent risks. On the administration's fiscal stimulus, he said the future effects are hard to know but that if they lead to greater business investment, this would increase the nation's productivity in what would be a very welcome outcome. Yet he also said there is "no hiding" from the unsustainability of the nation's fiscal path which he largely attributed to health care expenses.

Asked about emerging markets, he said some countries are facing severe problems tied to budget deficits and high borrowing but most are not. He stressed that Fed policy is centered strongly on the health of the domestic economy, not foreign ones.

He was also asked to address valuations in the stock market. Saying he doesn't comment on what is an appropriate level for the market, he did say that values may be in the "upper range" historically. But Powell downplayed the negative effects of a possible correction in the stock market, stressing that speculation is most damaging when consumers borrow heavily against an asset value that could fall, namely housing. "A simple drop in equity prices doesn't have those features," though he noted a market correction could hurt consumer consumption. Returning to housing risks, he said mortgage credit, though widely available to borrowers with good credit scores, is much less available than during the subprime financial crisis to those with low scores.

Powell downplayed the importance that the accommodative description of the funds rate has been dropped from the FOMC statement, saying it doesn't imply a change in policy and that he believes policy is in fact still accommodative. Yet he said the Fed doesn't have a precise understanding of where a particular funds level stops being accommodative and that the term has run its useful life. Powell noted the uncertainties tied to the idea of a neutral policy rate saying the Fed is "bad" at forecasting productivity and that major improvement here would lead to a higher neutral rate. He also noted a 1 tenth increase in the longer run federal funds neutral rate to 3.0 from 2.9 percent in the FOMC forecasts, saying it could reflect a rise, however modest, in expectations for future productivity.

Definition
The Fed announced in 2011 that then Fed Chair Ben Bernanke would hold press briefings four times a year to explain the FOMC's latest quarterly economic projections. The purpose of the briefings is to provide additional context for the FOMC's policy decisions and to allow for questions-and-answers with the press. According to the Fed, the "introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication." The press briefing is held at 2:30 p.m. ET on the days of FOMC statements in which quarterly projections are released. Beginning in 2019, the briefing will be held after each FOMC meeting. The policy statement is released at 2:00 p.m. ET after the conclusion of every FOMC meeting regardless of whether there are forecasts or not.  Why Investors Care
 

2018 Release Schedule
Released On: 3/216/139/2612/19
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