🗽Fed chair Jerome Powell starts press conference (LIVE)

US Federal Reserve decided to cut interest rates by 25 bps to 4.75% today. Notable removal of language expressing "greater confidence" in inflation moving sustainably toward 2% target, suggesting increased caution about inflation progress.

Here is the Jerome Powell press conference highlights:

• Economic activity has shown strength since September meeting:

  • Downside risks to economic activity have diminished

  • Overall economic data has been stronger than expected

• On inflation and policy stance:

  • Powell expressed increased confidence in inflation moving toward 2% target

  • The removal of "confidence" language in statement was not meant to signal concerns about inflation stickiness

  • Policy remains restrictive despite the rate cut

  • Inflation appears to be on a sustainable path down to 2%

• Labor market assessment:

  • The labor market has cooled significantly and is now essentially in balance

  • Importantly, no further cooling in labor market is needed to achieve the 2% inflation target

  • If labor market deteriorates, Fed could move more quickly with policy adjustments

• On forward guidance and uncertainty:

  • Fed prefers not to provide extensive forward guidance at this time

  • Powell acknowledged a fair amount of uncertainty in the outlook

  • The Fed maintains its position of not commenting on fiscal policy

• On bond market dynamics:

  • Current bond rate movements appear to be primarily driven by growth expectations rather than higher inflation expectations

  • Powell indicated the Fed is not at a stage where bond rates need to be factored into policy decisions

• On political considerations:

  • Powell emphasized that in the near term, the election will have no effect on policy decisions

  • Any administration or Congressional policies' economic effects would be considered alongside other factors

  • Fed maintains its position of not commenting on fiscal policy

In an initial reaction, EURUSD dropped by an additional 0.12%; however, it has fully recovered following further remarks from Powell and is now up 0.59% for the day. US100 and US500 are reversing their earlier declines, with both Gold and Bitcoin also moving upward.