Federal Reserve Chair Jerome Powell is set to speak at the Greater Providence Chamber of Commerce 2025 Economic Outlook Luncheon on Tuesday. This event marks Powell’s first public address since the Federal Open Market Committee (FOMC) decided to lower the central bank’s key borrowing rate. From global to personal, the officials made a considerable pivot from short-term to long-term economic conditions. They lowered the benchmark interest rate by 25 basis points to a target range of 4% to 4.25%.
The luncheon will commence with Powell’s speech, scheduled to stream live at 12:35 p.m. ET. Attendees will include local business leaders and economists who are keen to hear insights about the economy and future monetary policy. This discussion is perhaps our most timely yet. FOMC meeting participants have indicated an increased likelihood of two further rate cuts this year, in addition to more cuts over the next 24 months.
Though officials like the Fed’s Stephen Miran have called for an aggressive slashing of rates, others are more guarded in their optimism. Dangers & Delusions Chicago Fed President Austan Goolsbee placed a significant amount of blame on overzealous officials. He cautioned against making cuts in an overly aggressive manner, arguing they risked destabilizing the economy. The first, delivered by St. Louis Fed President Jim Musalem, noted the limited room for further interest rate reductions. He put the spotlight on the divisions within the Fed itself over how aggressive or hawkish monetary policy should be.
Powell has pretended that the recent cut is a preemptive “risk management” move. He posits that officials have become more concerned about the risk of a labor market “crunch,” moving their concern beyond purely inflationary dangers. This is a big shift in tone from the policy discussions over the last few years which often focused on keeping inflation in check.
The context surrounding Powell’s speech suggests an exceedingly complex economic landscape. The fact that the FOMC is lowering the key borrowing rate has hidden some important divisions internally over where policy should go. The economy continues to show pressure on multiple fronts, especially in the labor market. During these meetings, Powell and other FOMC members will detail how they plan to continue steering through these challenges in the coming months.