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Federal Open Market Committee press conference: Live coverage

May 7, 2025 1:45 PM

During the past six weeks, Federal Reserve officials have found many ways of saying the same thing: They are waiting to see how sweeping trade policy changes affect the U.S. economy before adjusting monetary policy. On Wednesday, Fed Chair Jerome Powell will have to come up with a few more.

The Federal Open Market Committee is broadly expected to hold its benchmark interest rate steady between 4.25% and 4.5%. But during his post-meeting press conference, Powell will be tasked with explaining that decision in the context of recent economic and political developments.

Shortly after the Fed's last monetary policy meeting in March, President Donald Trump rolled out a bevy of new tariffs, upping the import tax on virtually all goods coming into the country and escalating the U.S.' trade war with China. The announcement triggered massive selloffs of stocks and bonds, caused economic forecasts to plummet and eroded confidence among consumers and businesses alike.

Those fears spiked again after the president ramped up his pressure campaign on the Fed to cut rates, even insinuating that he might try to remove Powell from office.

Last month, Powell insisted that the Fed is "never going to be influenced by any political pressure." He also said the central bank does not know how tariffs will impact the economic outlook and might not for some time.

"It's just too soon to say what the appropriate monetary policy response to these new policies will be," Powell said two days after the tariff announcement. "Fast forward a year from now, the uncertainty will be much lower and the effects of the policies will be clear."

Scott Bessent speaks at a House Appropriations Subcommittee on Financial Services and General Government hearing.

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Trump has since paused some of the more damaging elements of his trade policy and signaled a willingness to negotiate down some of the lingering tariffs. He also said he has "no intention" of firing the Fed chair. As a result, stock values have recovered to their pre-tariff announcement levels and the bond market has stabilized.

Yet, the president continues to call for cuts, arguing that inflation is waning and current interest rates are weighing down economic economic activity. Indeed, recent government data releases show inflation continuing to move toward the Fed's 2% target and the labor market remaining strong.

In light of this mix of economic indicators, financial analysts expect Powell to say as little as possible in his press conference.

In a note issued Wednesday morning, Thomas Simons, chief economist for Jeffries, wrote that he expects the committee to acknowledge slower growth in its policy statement and for Powell to affirm both the improved economic figures as well as the heightened uncertainty of the current moment. Beyond that, Simons said he expects Powell to avoid being pinned down on specifics.

"A press conference from Powell will likely feature a host of questions about hypothetical outcomes on trade/tariffs and/or fiscal policy issues that he cannot and will not comment on for a variety of reasons," he wrote. "No matter how comprehensive the question is contextualized, these answers are lose-lose propositions for Powell."

7 Posts

15h 57m ago

Powell dodges question about departure

By Kyle Campbell

Federal Reserve Chair Jerome Powell.

Bloomberg News

Fed Chair Jerome Powell declined to say whether he would remain on the Federal Reserve Board of Governors after his term ends next or if he would remain on through the end of his governorship in 2028.

"I don't have anything for you on that," Powell said when asked during his post-FOMC meeting press conference.

"My whole focus is on … trying to navigate this tricky passage we're in right now, trying to make the right decisions," he said. "We want to make the best decisions for the people that we serve. That's what we think of that day and night, and this is a challenging situation that's 100% of our focus right now."

President Joe Biden nominated Powell to a second four-year term as Fed chair in 2022, but he was sworn in for a full 14-year term on the board in 2014. He is not obligated to vacate his board position, but past chairs have tended to leave the board quickly once a new chair is installed.

Powell could in theory be nominated for another chairmanship, but President Donald Trump has made it clear that he wants someone else to fill that position as soon as possible.

Powell also noted that Trump has not invited him to meet since retaking office earlier this year.

16h 12m ago

Powell offers no comment on spending cuts

By John Heltman

Federal Reserve Chair Jerome Powell.

Bloomberg News

Federal Reserve Chair Jerome Powell said that he would not offer any perspective about whether spending cuts being considered by Congress are wise in an uncertain macroeconomic environment, insisting that it is inappropriate for the Fed to offer such advice.

"We don't give Congress fiscal advice," Powell said. "We take what they do as a given, and we put it in our models and get our assessment of the economy. So I wouldn't want to speculate on that. We do know that the debt is on an … unsustainable path, and it's on Congress to figure out how to get us back on a sustainable path. They don't need our advice on fiscal policy any more than we need their advice on monetary policy."

Congress is in the process of developing its 2025 budget and simultaneously considering revisions to the tax code. The House Financial Services Committee last week marked up a budget bill that would include dramatic cuts to the Consumer Financial Protection Bureau and the elimination of the Public Company Accounting Oversight Board.

Powell likewise demurred on a question about President Trump's threats to remove him from office, saying that his prior statements that such a move would not be legal remain accurate.

"I don't have anything more for you on that," Powell said. "I've pretty much covered that issue."

16h 23m ago

Powell: Fed not involved in mission creep

By Kyle Campbell

Federal Reserve Chair Jerome Powell.

Bloomberg News

Federal Reserve Chair Jerome Powell said he welcomes critiques of the Federal Reserve's actions but insists the central bank has not engaged in the type of "mission creep" that some have accused it of.

During his post-FOMC press conference the Fed chair pushed back against claims that the central bank went beyond its statutory mandates by engaging in climate oversight.

"We've done really, very little on climate. You can say that little bit that we've done was too much, but I wouldn't want to give any impression that we've taken climate as something that we're spending a lot of time and energy on," he said. "We're not."

Powell's comment came in response to a question about comments from former Fed Gov. Kevin Warsh, who recently accused the institution of engaging in "mission creep" by going too far on matters of climate and being too involved in financial markets.

Powell said the criticism about the Fed's approach to quantitative easing was fair and "welcomed." He noted that the institution could have done a better job of explaining when and how its asset purchases transitioned from an effort to stabilize markets to one focused on monetary support.

He also noted that the Fed could have rolled back QE sooner, adding that the Fed itself is in the process of reviewing its past monetary actions.

"We certainly, with the benefit of hindsight, could have tapered earlier or faster. That's absolutely right," he said. "But this is all very welcome."

16h 34m ago

Powell hedges on combating stagflation

By Kyle Campbell

Federal Reserve Chair Jerome Powell

Bloomberg News

Fed Chair Jerome Powell said it is too early to say whether the job market or price stability are more jeopardized by the current economic environment.

During his post-FOMC meeting press conference Powell said the central bank will have to wait and see which side of its dual mandate will be more heavily impacted by tariffs and other policy changes being considered by the Trump administration.

"I don't think we can say which way this will shake out. There's a great deal of uncertainty, for example, where tariff policies are going to settle out, and also, when they do settle out, what will be the implications for the economy, for growth and for employment?" Powell said. "I think it's too early to know that."

In the meantime, Powell said the Fed is well positioned to respond to either a sharp uptick in inflation or a rapid deterioration of the job market.

"Our policy is modestly or moderately restrictive. It's 100 basis point less restrictive than it was last fall. And so we think that leaves us in a good place to wait and see," he said. "We don't think we need to be in a hurry. We think we can be patient. We're going to be watching the data. The data may move quickly or slowly, but we do think we're in a good position where we are able to let things evolve and become clearer in terms of what should be the monetary policy."

17h 8m ago

Markets slump on downbeat Fed statement about economy

By John Heltman

Fear Of Unknown Leaves Traders Facing Bouts Of Volatility-nyse-trader-bloomberg-042122

Bloomberg News

Trading markets slumped immediately following the Federal Open Market Committee's decision to keep the Federal Funds Rate unchanged at between 4.25 and 4.5% Wednesday, likely in response to a more muted tone from the committee about U.S. economic prospects.

The S&P 500 and Dow Jones Industrial Indices initially rallied on the news that interest rates would remain unchanged, then fell by about 0.5% before stabilizing. The Nasdaq index, which lists more tech stocks, slumped even more, losing 0.89% on the day as of 2:15pm. The KBW Bank Index, which lists bank stocks, also slumped on the news but remained up about 0.25% on the day.

The FOMC policy statement noted that "swings in net exports have affected the data" around economic indicators in recent weeks, the central bank maintained that economic growth is continuing at a "solid" pace.

The committee also said that "uncertainty about the economic outlook has increased further" in recent weeks and that "the risks of higher unemployment and higher inflation have risen," conditions known as stagflation. Stagflation is particularly difficult for the central bank because it forces policymakers to choose between boosting the economy or stabilizing prices, necessarily sacrificing one or the other in the near term.

17h 28m ago

Fed holds rates steady amid increased uncertainty

By Kyle Campbell

Bloomberg Nnews

The Federal Open Market Committee voted unanimously to keep its target interest rate between 4.25% and 4.5% on Wednesday.

In its official statement, the group warned of rising economic uncertainty and heightened risks to both the labor market and price stability.

"Uncertainty about the economic outlook has increased further," the policy statement reads. "The committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen."

Fed officials had for weeks signaled — and in some cases, explicitly called for — no change to be made to the federal funds rate at this month's meeting, citing the murky economic outlook caused by sweeping tariff proposals and other fluctuating policies in Washington.

The FOMC noted that economic data has been impacted by "swings in net exports," as companies increased import volumes to get ahead of anticipated tariff increases. Because imports count as negatives when calculating gross domestic product, the result was a significant decline in first quarter GDP relative to last year.

Still, the committee said overall economic activity has expanded at a "solid pace," unemployment has stabilized at a low rate and inflation "remains somewhat elevated."

17h 48m ago

Many outlooks, one conclusion

By Kyle Campbell

Federal Reserve Gov. Christopher Waller said recently that he doesn't expect the Federal Open Market Committee to consider rate cuts until the second half of the year.

Bloomberg News

In speeches and appearances since the March meeting, FOMC participants have agreed that policy should remain unchanged in May, but they have characterized that outlook in slightly different ways.

Fed Gov. Christopher Waller has been among the officials most willing to "look through" a one-time jump in prices caused by tariffs.

Waller said continued strong readings on inflation and employment could support "good news" rate cuts — those done in response to the economy reaching a stable equilibrium between growth and inflation — at some point this year. But, he said, the Fed is likely a few months away from making such a determination.

"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," Waller told Bloomberg TV. "When you get to the second half of the year, we'll start having better ideas of what's going to happen with the tariff world that the administration is considering, and by then you'll start seeing more in the form of tariff price pass through and also stuff on the real side."

Others have said the inflation outlook is less rosy than headline figures indicate. Fed Gov. Adriana Kugler said she is concerned rising goods prices could be a harbinger of renewed inflationary pressures.

"I am also monitoring any risks to the outlook, especially upside risks on inflation or downside risks to employment. Still, I think our monetary policy is well positioned for changes in the macroeconomic environment," she said. "Thus, I will support maintaining the current policy rate for as long as these upside risks to inflation continue, while economic activity and employment remain stable."

Federal Reserve Bank of Minneapolis President Neel Kashkari — an alternate member of the FOMC who is set to vote today in place of Kansas City Fed President Jeffrey Schmid — said the Fed could be forced to cut interest rates in the face of economic deterioration or raise them in response to runaway inflation. Because of this, he has set a high bar for a move in any direction.

"In my view, the hurdle to change the federal funds rate one way or the other has increased due to the tariffs," he wrote in an essay last month.

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twitter	JohnHeltman
mailto	john.heltman@arizent.com
linkedin	john-heltman-84b6b4a