Powell: The labor market has shown significant downside risks, and action that is too slow may result in labor market pressures.

BlockBeats News, October 15th, Federal Reserve Chairman Powell stated that the slow transmission risk of tariffs is beginning to manifest as persistent inflation. The labor market has shown significant downside risks. As risks become more balanced, policy needs to shift towards a more neutral stance.

If the Federal Reserve acts too quickly, it could derail the anti-inflation task. Data since the July meeting has shown a clear softening in the labor market. Conversely, acting too slowly could put pressure on the labor market.

The Federal Reserve will not attempt to lock in the equilibrium level of employment; the standard error itself could be 50,000. (FXStreet)