Fed Chair Jerome Powell Set To Speak As Economists Raise Concerns Over Risks Arising From Potential Policy Missteps And 2024 Election

Federal Reserve Chair Jerome Powell is scheduled to speak on Monday amid growing concerns among economists about potential policy mistakes and 2024 election risks.

What Happened: The National Association for Business Economics (NABE) released a survey on Sunday revealing that 39% of 32 professional forecasters consider a “monetary policy mistake” as the greatest threat to the U.S. economy over the next year.

This concern surpasses the 23% who view the upcoming U.S. presidential election and the same percentage who worry about escalating conflicts in Ukraine and the Middle East as significant risks.

Powell is expected to elaborate on the Federal Reserve’s recent decision to cut its benchmark interest rate by 50 basis points during the Sep. 17-18 meeting. He will also discuss the framework for anticipated reductions in borrowing costs through the remainder of this year and into 2025.

NABE President Ellen Zentner said, “More than half of the NABE Outlook Survey panelists believe the risks to their forecasts over the next 12 months are weighted to the downside.” The survey also indicated that panelists have revised their economic growth forecasts higher for 2024 but lowered them for 2025.

Powell’s address is scheduled for 12:55 p.m. CDT in Nashville, Tennessee.

See Also: Nasdaq, S&P 500 Futures Slip Ahead Of Inflation Data

Why It Matters: The Federal Reserve’s recent interest rate cuts have been a focal point for both economists and investors. On Sept. 21, the Fed’s half-point rate cut triggered a market rally. This move was seen as a positive signal for U.S. stocks and commodities, reducing bond market volatility.

The subsequent Benzinga poll on Sep. 25 indicated that the rate cuts could benefit small-cap stocks, making loans cheaper for companies needing capital for growth.

Additionally, the Personal Consumption Expenditures Price Index report on Friday showed lower-than-expected inflation, strengthening confidence in the Fed’s decision to cut rates. This report is crucial as the PCE is the Fed’s preferred inflation gauge and could influence future rate cuts.

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Fed Chair Jerome Powell’s illustration was created using artificial intelligence via Midjourney.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.