US economy 'in solid position' but will slow, Fed chairman says

“Despite high uncertainty, the economy is in a solid position,” says Jerome Powell, chairman of the US Federal Reserve.

He himself spoke on Wednesday, after the Fed moved forward, as expected, with maintaining reference interest rates , following the June meeting.

“Unemployment remains low and the labor market is at or near maximum employment,” Powell said, before underlining the importance of keeping interest rates steady in order to respond to a situation where uncertainty reigns. The Fed is “well positioned to respond in a timely manner to economic developments” given its current monetary policy, he said.

In any case, rising prices are a significant problem, with the Fed predicting an acceleration to 3% by the end of 2025 (the previous estimate was 2.7%). “Inflation has come down significantly but remains above our 2% target,” warned the head of that central bank.

In the coming years, the indicator is expected to slow down to year-on-year growth of 2.4% in 2026 and 2.1% in 2027.

At the same time, poll results indicate a decline in economic sentiment among households and business owners, along with “high uncertainty about economic forecasts,” which reflects “concerns about Trump’s trade policy,” according to Powell.

As far as the labor market is concerned, it “remained solid,” with data indicating that the unemployment rate “remains low,” at 4.2%. At the same time, wage growth “continues to outpace” the acceleration of inflation.

He himself pointed to indicators such as the number of people active in the job market, job creation and wages themselves, which are “all at healthy levels”. He acknowledges, however, that “a very, very slow cooling” may be occurring, but that this should not be perceived as a problem, at least for now.