At the FOMC press conference on July 31, 2024, Federal Reserve Chairman Jerome Powell gave an opening statement and answered questions from reporters.
Once again, the Federal Reserve decided to maintain the current 5.25% to 5.5% federal funds rate. Despite encouraging data on inflation, Powell defended the Committee’s decision as consistent with their dual mandate, saying they would like to see additional evidence of the economy’s steady progress toward their 2% target.
Powell did state a rate cut for September is “on the table”—just the encouragement traders were hoping for. After these remarks, stocks reached their highs of the day, and mortgage interest rates fell by 0.1%, ending the day at 6.7%.
Keep reading for the direct timestamps and transcripts for every time Powell mentioned housing during the press conference.
And don’t miss Byron Lazine’s full breakdown on today’s Hot Sheet.
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Comments on Housing from Powell’s Opening Statement
During his opening statement on July 31, 2024, Powell mentioned housing two times:
[01:38] – “Growth of consumer spending has slowed from last year’s robust pace but remained solid. Investment in equipment and intangibles has picked up from its anemic pace last year. In the housing sector, investment stalled in the second quarter after a strong rise in the first. Improving supply conditions have supported resilient demand and the strong performance of the US economy over the past year.
[03:28] – “My colleagues and I are acutely aware that high inflation imposes significant hardship as it erodes purchasing power, especially for those least able to meet the higher costs of essentials like food, housing and transportation. Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. In support of these goals, the committee decided at today’s meeting to maintain the target range for the federal funds rate at 5.25% to 5.5% and to continue reducing our Securities Holdings.”
Housing-Related Comments from Q&A Segment of Powell’s Press Conference
While taking questions from reporters, the topic of housing came up an additional two times.
[08:52] – Follow-up question from Howard Schneider, Reuters:
“And just to follow up on that, specifically in what ways right now—given all you’ve seen over the last few months in particular on shelter on services, etc—in what ways are you not confident right now that inflation is on the way back to 2%?”
[09:06] Powell’s response:
“ I think it’s just a question of seeing more good data…The last couple of readings have certainly added to confidence, and we’ve seen progress across all three categories of core PCE inflation—that’s goods, non-housing services, and housing services. So, it’s really just, you know, we had a quarter of poor inflation data at the beginning of the year. Then we saw some more good inflation data. We had seven months at the end of last year. We just want to see more and gain confidence. And as I said…we did gain confidence, and more good data would cause us to gain more confidence.”
[19:05] – Question from Rachel Siegel, The Washington Post:
“On inflation, do the past few months of good reports look like what we saw last year where you really had a lot of momentum with a few bumps in between? Would you characterize that kind of momentum as ‘back on track’ at this point in the year?”
[19:23] Powell’s response:
“Actually, what we’re seeing now is a little better than what we saw last year. Last year, as we pointed out late in the year, a whole lot of the progress we saw last year was from goods prices, which were going down at an unsustainable rate—disinflating at an unsustainable rate. This is a broader disinflation. This has goods prices coming down but we’re also now seeing progress in the other two big categories: non-housing services and housing services.
“So, you know, the thing is, we’ve only got one-quarter of that. We had seven months of low inflation. I would say the quality of this is higher, and it’s good, but so far, it’s only a quarter. So I think you know we need to see more to have more confidence that we’re on a good path down to 2%.
“But as I mentioned, our confidence is growing because we’ve been getting good data and things like the ECI report and frankly the softening in the labor market conditions give you more confidence that the economy is not overheating. It doesn’t look like an overheating economy and it looks like an economy that’s normalizing.”
