Good afternoon. My colleagues and I remain squarely focused on achieving our dual-mandate goals of maximum employment and stable prices for the benefit of the American people. The economy is strong overall and has made significant progress toward our goals over the past two years. Labor market conditions are solid, and inflation has moved closer to our 2% longer-run goal, though it remains somewhat elevated. In support of our goals, today the Federal Open Market Committee decided to leave our policy interest rate unchanged. We also made the technical decision to slow the pace of decline in the size of our balance sheet. I'll have more to say about these decisions after briefly reviewing economic developments. Economic activity continued to expand at a solid pace in the fourth quarter of last year, with GDP rising at 2.3%. Recent indications, however, point to a moderation in consumer spending following the rapid growth seen over the second half of 2024. Surveys of households and businesses point to heightened uncertainty about the economic outlook. It remains to be seen how these developments might affect future spending and investment. In our summary of economic projections, the median participant projects GDP to rise 1.7% this year, somewhat lower than projected in December, and to rise a bit below 2% over the next two years. In the labor market, conditions remain solid. Payroll job gains averaged 200,000 per month over the past three months. The unemployment rate at 4.1% remains low and has held in a narrow range for the past year. The jobs-to-workers gap has held steady for several months. Wages are growing faster than inflation and at a more sustainable pace than earlier in the pandemic recovery. Overall, a wide set of indicators suggests that conditions in the labor market are broadly in balance. The labor market is not a source of significant inflationary pressures. The median projection for the unemployment rate in the SEP is 4.4% at the end of this year and 4.3% over the next two years. Inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2% longer-run goal. Estimates based on the Consumer Price Index and other data indicate that total PCE prices rose 2.5% over the 12 months ending in February, and that, excluding the volatile food and energy categories, core PCE prices rose 2.8%. Some near-term measures of inflation expectations have recently moved up. We see this in both market and survey-based measures, and survey respondents, both consumers and businesses, are mentioning tariffs as a driving factor. Beyond the next year or so, however, most measures of longer-term expectations remain consistent with our 2% inflation goal. The median projection in the SEP for total PCE inflation is 2.7% this year and 2.2% next year, a little higher than projected in December. In 2027, the median projection is at our 2% objective. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today's meeting, the Committee decided to maintain the target range for the federal funds rate at 4.25-4.5%. Looking ahead, the new administration is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy. While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their effects on the economic outlook is high. As we parse the incoming information, we're focused on separating the signal from the noise as the outlook evolves. As we say in our statement, in considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will assess incoming data, the evolving outlook, and the balance of risks. We do not need to be in a hurry to adjust our policy stance, and we are well-positioned to wait for greater clarity. In our SEP, FOMC participants wrote down their individual assessments of an appropriate path for the federal funds rate based on what each participant judges to be the most likely scenario going forward. An admittedly challenging exercise at this time, in light of considerable uncertainty. The median participant projects that the appropriate level of the federal funds rate will be 3.9% at the end of this year and 3.4% at the end of next year, unchanged from December. While these individual forecasts are always subject to uncertainty, as I noted, uncertainty today is unusually elevated. These projections are not a Committee plan or a decision. Policy is not on a preset course. As the economy evolves, we will adjust our policy stance in a manner that best promotes our maximum employment and price stability goals. If the economy remains strong and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly. Our current policy stance is well-positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate. At today's meeting, we also decided to slow the pace of decline in our balance sheet. Since we began balance sheet runoff, our securities holdings have declined by more than USD 2 trillion. While market indicators continue to suggest that the quantity of reserves remains abundant, we have seen some signs of increased tightness in money markets. Beginning in April, the monthly cap on Treasury redemptions will be lowered from USD 25 billion to USD 5 billion. Consistent with the Committee's intention to hold primarily Treasury securities in the longer run, we are leaving the cap on agency securities unchanged. This action has no implications for our intended stance of monetary policy and should not affect the size of our balance sheet over the medium term. The Committee also continued its discussions as part of our five-year review of our monetary policy framework. At this meeting, we focused on labor market dynamics and our maximum employment goal. As we have indicated, our review will include outreach and public events involving a wide range of parties, including Fed Listens events around the country and a research conference in May. Throughout this process, we will be open to new ideas and critical feedback, and we will take on Board lessons of the last five years in determining our findings. We intend to wrap up the review by late summer. The Fed has been assigned two goals for monetary policy: maximum employment and stable prices. We remain committed to supporting maximum employment, bringing inflation sustainably to our 2% goal, and keeping longer-term inflation expectations well anchored. Our success in delivering on these goals matters to all Americans. We understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We, at the Fed, will do everything we can to achieve our maximum employment and price stability goals. Thank you. I will look forward to your questions. Howard. Howard Schneider with Reuters. Thanks for your time. Two things on sort of the real side here: inflation and then GDP. How much of the higher inflation forecast for this year is due to tariffs? Since the policy path remains the same, are you effectively reading this as a one-time price level shock? Okay. How much of it is tariffs? Let me say that it is going to be very difficult to have a precise assessment of how much of inflation is coming from tariffs and from other sources, and that is already the case. You may have seen that goods inflation moved up pretty significantly in the first two months of the year. Trying to track that back to actual tariff increases, given what was tariffed and what was not, is very, very challenging. Some of it. The answer is clearly some of it. A good part of it is coming from tariffs. We will be working, and so will other forecasters, to try to find the best possible way to separate non-tariff inflation from tariff inflation. In terms of your sort of looking-through question, it is too soon to say about that. As I've mentioned, it can be the case that it's appropriate sometimes to look through inflation if it's going to go away quickly without action by us, if it's transitory. That can be the case in the case of tariff inflation. I think that would depend on the tariff inflation moving through fairly quickly and would depend critically as well on inflation expectations being well anchored, longer-term inflation expectations being well anchored. I guess I'm looking at the out years here and the fact that the policy path doesn't change at all and inflation is unchanged in the out years also. Doesn't that imply you all have basically decided that there is no signal here and that it's just going to—we're back to transitory again? I think that's kind of the base case. As I said, we really can't know that. We're going to have to see how things actually work out. The fact that there wasn't much change, I think that's partly because you see weaker growth but higher inflation. They kind of offset. Also, frankly, a little bit of inertia when it comes to changing something in this highly uncertain environment. You know, I think there is a level of inertia where you just say, "Maybe I'll stay where I am." Colby. Thank you. Colby Smith of The New York Times. You just described inflation expectations as well-anchored. Has your confidence in that assessment changed at all, given the increase in certain measures and the high degree of uncertainty expressed by businesses, households, and forecasters? On inflation expectations, of course, we do monitor inflation expectations very, very carefully, basically every source we can find, and short-term, long-term, households, businesses, forecasters, market-based. I think the picture broadly is this: You do see increases widely in short-term inflation expectations. People who fill out surveys and answer questionnaires are pointing to tariffs about that. If you look in the survey world, if you look a little further out, you really do not see much in the way of an increase. Longer-term inflation expectations are mostly well-anchored, if you look at the New York, for example. You have market-based, and it is the same pattern. People and markets are pricing in, in break-evens, some higher inflation over the next year must be related to tariffs, we know from the surveys. If you look out five years or the five-year, five-year forward, you'll see that break-evens are either flat or actually slightly down in the case of the longer-term ones. We look at that, and we will be watching all of it very, very carefully. We do not take anything for granted. It's at the very heart of our framework, anchored inflation expectations. That's what you see right now. How much weight do you put on the deterioration in consumer confidence surveys? You said recently that this is perhaps not the best indication of future spending. I am curious what you think is behind this deterioration and to what extent it could be a leading indicator for hard data. Let's start with the hard data. You know, we do see pretty solid hard data still. Growth looks like it's maybe moderating a bit, consumer spending moderating a bit, but still at a solid pace. Unemployment's 4.1%. Job creation most recently has been at a healthy level. Inflation has started to move up now, we think, partly in response to tariffs. There may be a delay in further progress over the course of this year. That's the hard data. Overall, it's a solid picture. The survey data, both household and businesses, show significant rise in uncertainty and significant concerns about downside risks. How do we think about that? That is the question. As I mentioned the other day, as you pointed out, the relationship between survey data and actual economic activity hasn't been very tight. There have been plenty of times where people are saying very downbeat things about the economy and then going out and buying a new car. We do not know that that will be the case here. We will be watching very carefully for signs of weakness in the real data. Of course, we will. You know, given where we are, we think our policy is in a good place to react to what comes. We think that the right thing to do is to wait here for greater clarity about what the economy is doing. Nick. Nick Timiraos of The Wall Street Journal. Chair Powell, Chair Greenspan once defined price stability as an environment in which inflation is so low and stable over time that it doesn't materially enter into the decisions of households and firms. Can you say that today, that we have that price stability, that households and businesses are ignoring price growth, and you see buy-in advance, psychology, big changes in inventories and surveys that show consumers, at least in the short run, expect higher inflation? I do like that definition a lot. In fact, I used it at the recent conference where I spoke. I think a world where people can make their daily economic decisions and businesses and they're not having to think about the possibility of significantly high inflation—we know inflation will bounce around—that is price stability. You know, I think we were getting closer and closer to that. I wouldn't say we were at that. Inflation was running around 2.5% for some time. I do think with the arrival of the tariff inflation, further progress may be delayed. The SEP doesn't really show further downward progress on inflation this year. That is really due to the tariffs coming in. Delayed. If you look at our forecasts, we do see ourselves getting back into the low twos in 2026 and then down to two by 2027. Of course, highly uncertain. I see progress having been made toward that and then progress in the future. I think that progress is probably delayed for the time being. If that's the case, why are there cuts in the SEP for 2025? Again, people wrote down two cuts the last time. They look at the—they wrote down, you know, meaningful decline in growth from 2.1 to 1.7 in 2025, a tick up in the unemployment rate, so not much there, but core inflation up by 3/10. Those two kind of balance each other out. People—not everybody, but on balance—people wrote down similar numbers. The changes are not that big. The other factor, though, as I mentioned, is just really high uncertainty. What would you write down? I mean, it is really hard to know how this is going to work out. We think our policy is in a good place. We think it is a good place where we can move in the direction where we need to. In the meantime, it is really appropriate to wait for further clarity. Of course, you know, the costs of doing that, given that the economy is still solid, are very low. Edward. Thank you, Mr. Chairman. Edward Lawrence with Fox Business. With near 4% unemployment rate, that should be low enough to bring people in from the sidelines in terms of hiring. We are seeing the hiring rates have been stuck at 2023, 2024 levels. What is going on there? Yeah. That is a feature of—that has been for some time a feature of this labor market. You have pretty high participation accounting for aging. You have wages that are consistent with 2% inflation, assuming that we are going to keep getting relatively high productivity. We have unemployment pretty close to its natural level. Job—the hiring rate is quite low, but so is the layoff rate. You look at initial claims or layoffs. You are not seeing people losing their jobs, but you are seeing the people who do not have a job having to wait longer and longer. You know, the question is, which way does that break? If we were to see a meaningful increase in layoffs, that would probably translate fairly quickly into unemployment because people are—it is not a big hiring market. We have been watching that, and it is just not in the data. It hasn't happened. What we've had is a low firing, low hiring situation. It seems to be in balance now for the last six, seven, eight months. That's where we are. There's healthy levels of job creation, too. Overall, it's a labor market that's in balance. We watch it very carefully. Have we seen the administration, the new administration's policies in the economic numbers yet? When do you anticipate that happening? In labor or in other? In labor and inflation just across the economy? Have we started to see the new policies take effect in the numbers? You know, only in a kind of an early way. I mean, it's only been a few months, right? You know, for example, the layoffs that are happening here are certainly meaningful to the people involved, and they may be meaningful to a particular neighborhood or region or area. At the national level, they're not significant yet. We don't know. We don't know where that—how far that will go. We'll find out much more. I mentioned that you saw—we've had two very strong goods inflation readings in the last two months, which is very unexpected. I think hard to trace it to specific tariffs, but it must have something to do with—it's either noise and it'll come back. That's very possible, too. If it is persistent, then it must be to do with people buying ahead of tariffs or raising prices ahead of tariffs and things like that. Those kinds of things happen, and they are very, very hard to capture because so much of it is indirect. A great example is there were washing machines tariffed in the last round of tariffs, and prices went up. Prices also went up on dryers, which were not tariffed. The manufacturers just kind of followed the crowd and raised it. Things happen very indirectly. There will be a lot of work done in coming months to try to trace all that through. Ultimately, though, it is too soon to be seeing significant effects in economic data. Craig. Craig Torres from Bloomberg News. Thanks, Chair Powell. You said transitory price increases from tariffs are the base case. Transitory's the base case. Wasn't it the base case last time? Didn't the FOMC forecast lower inflation ahead last time? Wasn't the lesson that it quickly got into services, haircuts, daycare, everything else? I'm just wondering why the nine aren't taking that on board and are cutting twice this year. When you say last time, are you talking about the last? Pandemic. Yes. Pandemic? Because you could have been talking about the last time there were tariffs, in which case the inflation was transitory. Yeah. Yeah. No, of course, we're well aware of that. You know, it's still the truth. If there's an inflationary impulse that's going to go away on its own, it's not the right policy to tighten policy because by the time you have your effect, you're in effect that by design, you are lowering economic activity and employment. If that's not necessary, you don't want to do it. In real time, as we know, it's hard to make that judgment. We're well aware of what happened, obviously, with the pandemic inflation. I mean, we have to look at this as a different situation. There are differences and similarities. I mean, it's a different time. You know, we haven't had real price stability fully reestablished yet, and we have to keep that in mind. You know, we also have--we hear that people are very reluctant to take on--to allow prices to go up. At the same time, we hear that businesses are intending to pass many of these prices through. It is hard to say how this is going to work out. Steve. Thanks for taking my question, Mr. Chairman. The Bank of Canada, in its last policy statement, said, "Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation." I wonder if that kind of reflects your own sense of prioritization faced with higher prices and weaker growth that the idea is you have to take care of inflation. You know, we have two goals, right? We have maximum employment and price stability. We have to balance those. You know, there can be situations in which they're in tension, right? We actually have a provision in our consensus statement that says what we should do in that case. That's a very challenging situation for any central bank and certainly for us. What we say that we'll do is we'll look how far each of those two goals is—each of those two measures is from its goal. Then we'll ask how long we think it might take to get back to the goal for each of them. We'll make a judgment because our tools work in one direction. We're either tightening or loosening. It's a very challenging situation. Let me say, we don't have that situation right now. That's not where the economy is at all. It's also not where the forecast is. I don't know any mainstream forecasts that really show significant problems like that. Just to follow up, yesterday, the UCLA Anderson Forecast said there's a high probability of a recession. Where do you stand on whether or not the slowdown you're seeing creates a higher probability or concern that you may have on recession? Thank you. You know, there's always an unconditional possibility of a recession. It might be broadly in the range of one in four at any time. If you look back through the years, it could be within 12 months a one in four chance of a recession. The question is whether that—whether this current situation, those possibilities are elevated. I will say this: we don't make such a forecast. If you look at outside forecasts, forecasters have generally raised—a number of them have raised their possibility of a recession somewhat, but still at relatively moderate levels, you know, still in the region of the traditional, because they were extremely low. If you go back two months, people were saying that the likelihood of a recession was extremely low. It has moved up, but it's not high. Chris. Hi. Thank you. Chris Rugaber, Associated Press. As you know, I guess last night, President Trump fired two members of the Federal Trade Commission, an independent agency. This could cause the kind of legal fight about the administration's power to fire independent people. If those firings stand, is that a threat to the Fed's independence? Could he do the same thing to the Fed board? I think I did answer that question in this very room some time ago. I have no desire to change that answer and have nothing new for you on that today. I just—okay. Maybe I have another mulligan. As you know, I wanted to go back to the consumer sentiment, particularly the inflation expectations in the University of Michigan survey. In the summer of 2022, you cited the rise in the long-term inflation expectations in that index as the reason that you went big with a three-quarter point hike. I know you've—I mean, you've talked about all the different measures now, but you seem to not be placing the same weight on that. I'm just wondering, are you dismissing that, what we saw last week from the University of Michigan, or does that carry the same weight as it did in the past? I mentioned it back then, but in no way did I place a huge weight on it. I think that was an ex post story, but it wasn't the case. That was a preliminary reading, and this is. It is also this is that Michigan, the one you're referring to, the longer-term thing. You know, we look at it. We don't dismiss data that we don't like. We force ourselves to look at it. It is an outlier compared to market-based and compared to other survey-based assessments of longer-run inflation expectations. We have to keep that in mind. Again, I would just say we look at all of them. That one is kind of an outlier. You know, nonetheless, we take notice of it. Thank you. Mike McKee. Michael McKee from Bloomberg Radio and Television. There is a worry on Wall Street that when you say you want to study the net effect of the fiscal policies we may see on the economy, that you would end up waiting too long and be behind the curve in responding to any downturn. How can you reassure people that you can spot a problem early enough unless you decide to be preemptive? Yeah. Look, we're aware of it. We're well aware of how things are going to evolve and the time frames and all that. You know, we will use our tools to foster achievement of our goals to the best we can. Of course, we're going to try to be timely with that. For right now, the hard data are pretty solid. We are obviously aware of the soft sentiment data and the high uncertainty. We're watching that carefully. We think it's a good time for us to wait for further clarity before we consider adjusting our policy stance. Do you think it's going to be hard to get clarity in a government by tweet? I mean, do you have a feeling that at some point you actually will have a forecast you can trust? Yes, I think we will. I just--it's hard to say when that will be. You know, these decisions are going to be made, and they're going to be implemented. Then we'll know at that point. We'll know what the decisions are. We'll have to make assessments then about the implications for the economy. Those things will happen. A lot of them will happen over the course of, you know, in coming months, certainly over the course of this year. We'll be adapting as we go. Rachel. Hi, Chair Powell. Rachel Siegel from The Washington Post. Thank you for taking our questions. At the beginning, you were talking about separating the signal from the noise and tariff inflation from non-tariff inflation. Can you walk us through what that looked like over the last couple of months, if there were specifics from the January meeting to now that helped you make those distinctions? When we say separating the signal from the noise, that's just a way of saying that things are highly uncertain and that, you know, you're reading about developments. The news is full of developments of tariffs being put on and taken off and things like that. Some of that is noise in the sense that it's not really telling you anything. You're trying to extract a signal from that. The signal is what's going to be the effect on economic activity, on inflation, on employment, and all those things. That's really when we say signal and noise. Sorry, the second thing was. Or similarly for tariff inflation, non-tariff inflation, ways that you're making the distinctions. That's sort of a special case of that. You know, with the idea being, and I think, do think that the first two months of this year are a great example. You've got high readings for goods inflation after a string of readings that average close to zero. You have to ask, that's coming during tariffs. You know, it's very hard to actually scientifically go back and match up those increases and say, yes, I can prove that that's from tariffs. It kind of has to be to some extent. Plus noise. There can be idiosyncratic readings in various categories which will shortly reverse. That happens, too. That could be a big piece of it. You know, I think we'll know. In a couple of months, we'll know whether those were, you know, where that really was from. That is another case where I think it is going to be very, very challenging to unpack the inflation that we see over the course of this year and be able to say with confidence how much of that came from tariffs and how much of it did not. That is what we will be doing. We will be doing that, and so will everybody else. We will all be trying very hard to make that assessment. You know, I am sure we will make a lot of progress on that, and we already have. It is going to be a challenge. Do you have a sense yet as to what, in your mind, would make something cross from noise to a signal, what that threshold would look like? You know, it would depend on what we're talking about. I mean, obviously, you're looking for direct evidence that particular pieces of inflation are or are clearly not caused by tariffs. For example, if something that was, you know, in the service sector that was far away from anything that's tariffed, you might think, okay, that is, like, frankly, housing services inflation, which, by the way, has been behaving well, you know, which for some time was kind of our problem. Now it's been, it's slow, but it's definitely, you know, moving down in a very good way. It's more now with goods and, to some extent, with non-housing services inflation. Kelly. Thanks for taking our questions, Chair Powell. Kelly O'Grady, CBS News. Consumer sentiment has dipped dramatically, but you say the economy and the hard data is still solid. What is your message to consumers that clearly disagree and do not feel that strength? Because the hard data they are looking at is their grocery bill. Okay. A couple of things. The grocery bill is about past inflation, really. There was inflation in 2021, 2022, and 2023, and prices went up. The current level, it's not the change in prices. It's they're unhappy, and they're not wrong to be unhappy that prices went up quite a bit, and they're paying a lot for those things. That is the fundamental fact and has been for a long time, a couple of years, why people are unhappy with the economy. It's not that the economy is not growing. It's not that inflation is really high. It's not that unemployment is high. It's none of those things. We have, you know, 4.1% unemployment. We've got 2% growth. You know, it's a pretty good economy. People are unhappy because of the price level. I do, we completely understand and accept that. Just to follow up, why are you still projecting two rate cuts this year if your own projections show inflation higher for longer? Does that mean you see a slowdown in economic growth as a real threat? I think if you—yeah. I mean, remember, we came into this with—at the December meeting, the median was two cuts. The median was. You come in, and you see, broadly speaking, weaker growth but higher inflation. They kind of balance each other out. You think—and unemployment is really—there's really only a one-tenth change. There's just not a big change in the forecast. There really isn't. Modest, you know, meaningfully higher—I'm sorry—growth and meaningfully higher inflation, which call for different responses, right? They cancel each other out, and people just said, okay, I'm going to stay here. The second factor is it's so highly uncertain is just, you know, we're sitting here thinking—and we obviously are in touch with businesses and households all over the country. We have an extraordinary network of contacts that come in through the Reserve Banks and put in the Beige Book and also through contacts at the board. We get all that. We do understand that sentiment has fallen off pretty sharply. Economic activity has not yet. We are watching carefully. I would tell people that the economy seems to be—seems to be healthy. We understand that sentiment is quite negative at this time. That probably has to do with, you know, turmoil at the beginning of an administration that is making, you know, big changes in areas of policy. That is probably part of it. I do think the underlying unhappiness people have about the economy, though, is more—is more about the price level. Victoria. Hi, Victoria Guida with POLITICO. I wanted to ask, first of all, if you could clarify. You were talking about how tariffs were a good part of the uptick in the inflation forecast. I was just wondering what that specifically refers to. Is that the tariffs that have already been put in place? Is that anticipating some of the tariffs that might be coming on April 2? If you would not mind, talking a little more about the balance sheet decision and what drove that. Did that have anything to do with expectations of how the debt ceiling—raising the debt ceiling might affect the reserve supply? Yeah. In the SEP, you'll see that there's not further progress on core inflation this year. We're kind of going sideways. We don't ask people to write down how much of this is from tariffs and how much of it is not. Some of it is from tariffs. We know that tariffs are coming in. We know that they're probably already—all forecasters have tariff inflation affecting core PCE inflation, core CPI inflation this year without exception. I'm not aware of an exception. It's in there. I can't tell you how much of that it is. In terms of the balance sheet, I think the way I'd say it is, you know, it was the flows in and out of the TGA that got us thinking about it. As we thought about it, we really came to the view that this was a good time to make the move that we made. Broadly, committee came around to the view that we would do the same thing we'd already done, which is once we—I guess in June, was it June? Whenever it was, we lowered the pace of QT. We're just going to do that again. We're going to cut it roughly in half. The sense of that is, if you're cutting the pace of QT roughly in half, then the runway is probably doubled, okay? It's going to be slower for longer. People really liked that. People thought, that's a good idea. You know, it's like a plane. You can think of it like a plane coming in for a landing. As we get closer—and we, by the way, we still think that reserves are abundant, although you begin to see some of the things we look at begin to react a little bit. We still think that they're abundant. Of course, now the TGA is emptying out, so reserves are higher now. You can't really see the underlying signal. We came around to the view, and it had a lot of appeal. We did it. It really has no implications at all for monetary policy. It has no implications at all for the ultimate size of the balance sheet. It isn't sending a signal in any hidden way that you can try to tease out. It's just not there. We're basically—it's very consistent with our plans and our practices that we've published and that we've followed since we began this, what is a very successful, you know, rundown of the balance sheet. Again, the second time that we've slowed the pace, and we've said that we would stop when we were somewhat above the level we judge as ample. Clearly, we're not at that level yet, but we're going to be approaching it more slowly. It's a common-sense kind of a kind of a thing. It had—it had pretty broad appeal, I will say. Claire. Claire Jones, Financial Times. You said in January, Chair Powell, that inflation expectations remained well anchored. Would you still say they remain well anchored today? To reiterate the question of Elizabeth, if they're not so well anchored, why hasn't there been a more radical shift to the policy path today? Thank you. When we talk about inflation expectations being well anchored, we're talking about longer-run inflation expectations. They really haven't moved much, I mean, if at all. There's one reading that everyone's focusing on that's higher. The other survey readings and the market-based readings all show relatively, you know, well-anchored inflation expectations. You would expect that expectations of inflation over the course of a year would move around because conditions change. In this case, we have tariffs coming in. We don't know how big, what speed. There are so many things we don't know. We kind of know there are going to be tariffs, and they tend to bring growth down. They tend to bring inflation up in the first instance. I would say, you know, I'm not dismissing what we're seeing in short-term inflation expectations. We, as I mentioned, follow that very carefully. When we say expectations are well anchored, we're really looking at, you know, longer terms, five years and out. There's really no story to tell five years and out, either in market-based or in surveys. We'll watch it. I mean, we're not, you know, we're not going to miss any evidence that longer-term or medium-term inflation expectations are moving. Neil. Hi, Chair Powell. Neil Irwin with Axios. Treasury Secretary Bessent has observed that a large share of job growth over the last couple of years has been in what he calls government or government-adjacent sectors: health care, education. Do you agree that there's some weakness in underlying private job growth? Do you see the composition of job growth as something that has policy implications? That has been the case. We talked about that over the course of the last year. There were some good number of months and times when a lot of the job creation was concentrated in, you know, educational institutions, health care, state governments, things like that. There were also times when private sector job growth has been moving in a healthy range. I mean, they're all jobs. And remember, we're, you know, we're at very low unemployment for, you know, for quite a time now. I think it's a good labor market. It's something that we monitor carefully. From our standpoint, employment is employment. But, you know, the elected government is entitled to have, you know, we don't have policies that address different kinds of employment. The elected government has a different role, and they can have those. Kind of a quick QT question. Does the committee envision, at some point, tapering the MBS runoff as well? I think tapering it, I don't know. There's no plan to do that. You know, at a certain point, we'll stop runoff. We may or may not stop MBS runoff, though, because, you know, we can—we can—we want to stop runoff in net at some point. We haven't made any decisions about that. You know, we want the MBS to roll off our balance sheet. We really strongly desire that. We haven't made any decisions about that. You know, we will—I think we'd look carefully at letting that keep going but hold the overall size of the balance sheet in, you know, constant at some point, a point that we're not at yet. Simon. Simon Rabinovitch with The Economist. Thank you, Chair Powell. Several times today, you've said that you feel you're well-positioned to wait for greater clarity. At the same time, you could point to quite a few growth risks at the moment. We've seen a stock market that's gone quite wobbly, rapidly cooling housing sales, plunge in confidence surveys. Today, not only did the SEP mark down the growth outlook, 17 of 19 see risks to the downside. My question is, how confident are you that you're well-positioned? Is that one more thing that you're uncertain about? I'm confident that we're well-positioned in the sense that we're well-positioned to move in the direction we'll need to move. I mean, I don't know anyone who has a lot of confidence in their forecast. I mean, the point is, we are at, you know, we're at a place where we can cut or we can hold what is clearly a restrictive stance of policy. That's what I mean. I mean, I think that's well-positioned. Forecasting right now, it's, you know, forecasting is always very, very hard. In the current situation, I just think it's uncertainty is, you know, remarkably high. Sorry, standing here today, would you be surprised to pivot back towards rate cuts in May? I feel like I think we're not going to be in any hurry to move. As I mentioned, I think we're well-positioned to wait for further clarity and not in any hurry. Matt, you may. Matt Egan with CNN. Thank you, Chair Powell. The Fed statement released today removed a line that previously said the committee judges that the risks to achieving its employment and inflation goals are roughly in balance. Can you explain the decision to remove that line? Does it mean that you're now more concerned about inflation or about employment? Actually, it does not mean either of those things. You know, sometimes with language, it lives its useful life, and then we take it off. That was the case here. There is really not meant to be any signal here. Over the past year, you know, conveying the sense of the balance of risks was important that they be in balance or close to being in balance. That was useful as we approached lift-off, if you remember. We are past that. I am sorry, now beginning to cut. We just took it out. I actually would say that the more important thing now about risks, and this is in the pages like 10, 11, 12 of the SEP, if you look, participants widely raised their estimate of the risks to our uncertainty, but also of the risks to growth and our employment and inflation mandates. That's a more salient point now than whether they're in balance. Just on the stock market, the stock market has obviously declined significantly since the Fed last met. Are you concerned at all about some of the market volatility having a real economic impact in terms of hurting business spending or consumer spending, especially among higher-income households? Financial conditions matter to us because, you know, financial conditions are the main channel to the real economy through which our policy has its effects. They are important. What matters from a Fed standpoint for the macroeconomy is material changes to overall financial conditions that are persistent, that last for a while, long enough to actually affect economic activity. That is what we are looking for. I am not going to opine on the appropriate level of any market, equity, debt, commodities, or anything like that. I would just point you to the bigger picture again. You know, the real economy, the hard data are still in reasonably good shape. It is the soft data. It is the surveys that are showing, you know, significant concerns, downside risks, and those kind of things. We do not dismiss that. We are watching it carefully. You know, we do not want to get ahead of that. You know, we want to focus on the hard data. If that is going to affect the hard data, we should know it very quickly. Of course, we will understand that. You do not see that yet. Jennifer. Thank you, Chair Powell. Jennifer Schonberger with Yahoo Finance. As you look to navigate higher inflation and lower growth, the Fed has talked about heeding the lessons from the 1970s. Is the Fed willing to have a recession if it means breaking the back of inflation? Fortunately, we're in a situation where we have seen inflation move down from, you know, higher levels to pretty close to 2%, while the unemployment rate has remained very consistent with full employment, 4.1%. We now have inflation coming in from an exogenous source. The underlying inflationary picture before that was, you know, basically 2.5% inflation, I would say, and 2% growth and 4% unemployment. That is what we did. That is what together the economy accomplished. I do not see any reason to think that we're looking at a replay of the 1970s or anything like that. You know, inflation, underlying inflation is, you know, still running in the 2s with probably a little bit of a pickup associated with tariffs. I do not think we're facing—I would not say we're in a situation that's remotely comparable to that. Last month, the idea of a DOGE dividend was proposed, which would send USD 5,000 checks to every taxpayer from Doge savings. President Trump and Elon Musk have supported this. There are reports there could be a bill introduced on Capitol Hill. What impact might that have on household savings and spending in terms of your growth and outlook for inflation? You know, it's not appropriate for me to speculate on political ideas or fiscal policy for that matter. I'm going to pass on that one. Thank you. Daniel. Hi, Chair Powell. Daniel Avis from Agence France-Presse. You mentioned that tariffs are already having at least some impact on inflation. I'm just wondering how you and your colleagues on the FOMC have been thinking about the possibility of retaliatory tariffs from other countries, especially with April the 2nd coming up. Was this something you considered during this meeting? Thanks. Since the very beginning, we've had kind of a placeholder. The staff has a placeholder of range, really a range of possible outcomes from tariffs and from trade policy generally. They generally assume full retaliation in those. That is kind of baked into the numbers. What happens, it will be complicated, and there will be some retaliation and some not and all that. Ultimately, they're trying to, with the placeholder, give us a broad sense of what this might look like. When we actually know the specifics, we'll be able to have still uncertain but, you know, better-informed forecasts. Yes, that's in there. Last question goes to Jean. Hi, Chair Powell. Jean Yung with MNI Market News had a couple of questions on the balance sheet change that you made. The minutes had initially described your discussion on slowing QT as temporary until the debt ceiling is resolved. From what you said earlier, it does not sound like there is a desire to kind of regain the pace of QT that we have at the moment after the debt ceiling is resolved. Is that the case? Yes. We looked at pausing, and we looked at slowing. People came together very strongly behind slowing, not pausing, for a variety of reasons. People really came to be, you know, pretty strongly in favor of this move. Slows down the path and probably lengthens it, you know, doubles it effectively by slowing by half. People thought that's a good place to be. It'll, you know, help us assure that this path is a smooth one as we get closer and closer to that. That's how that came about. I guess my question is more, was that meant to be a temporary measure during the debt ceiling episode or? You know, it was actually the TGA flows, Treasury General Account flows that got us thinking about this. The more we thought about it, we came around to this. You know, it is, yes, it was provoked. The original discussion was provoked by that. I think what we came up with, though, was broader than that and different than that. It does address that issue. It really is also it fits in really nicely with our principles and our plans and the things we've done before and the things we said we would do. That's why I, you know, pretty strong support. I'd just say it's nothing to do with monetary policy, nothing to do with the size of the balance sheet. It's just kind of a common-sense adjustment as you get closer and closer. Let's slow down a little bit again. That way, we'll be more and more confident that we're getting where we need to get. You can take our time getting there. You know, we're shrinking the balance sheet every month. We think it was a good play and, as I mentioned, well-supported. Thanks very much.