Everyone and welcome my colleagues at the Federal Reserve and I are dedicated to serving the American people.

We do this by steadfastly pursuing the goals Congress has given us maximum employment and stable prices.

We're committed to making the best decisions we can based on facts and objective analysis.

Today we decided to lower interest rates.

As I will explain shortly.

We took this step to help keep the U.

S economy strong in the face of some notable developments and to provide insurance against ongoing risks.

The U.

S economy has continued to perform well.

We're into the 11th year of this economic expansion and the baseline outlook remains favorable.

The economy grew at a two and 1/2 percent pace in the first half of half of the year.

Household spending, supported by a strong job market, rising incomes and solid consumer confidence, has been the key driver of growth.

In contrast, business investment X and exports have weakened amid falling manufacturing output.

The main reasons appear to be slower growth abroad and trade policy developments, two sources of uncertainty that we've been monitoring all year since the middle of last year.

Global growth, the global growth outlook has weakened, notably in Europe and China.

Additionally, a number of geopolitical risks, including Brexit, remain unresolved.

Trade policy tensions have waxed and waned, and elevated uncertainty is weighing on US investment and exports.

Our business contacts around the country have been telling us that uncertainty about trade policy has discouraged them from investing in their businesses.

Business fixed investment posted a modest decline in the second quarter, and recent indicators point to continued softness.

Even so, with household spending remaining on a solid footing and with supportive financial conditions, we expect the economy to continue to expand at a moderate rate, as seen from FOMC participants.

Most recent projections the median expectation for real GDP growth remains near 2% this year and next before edging down toward its estimated longer run value.

The job market remains strong.

The unemployment rate has been near half century lows for a year and 1/2 and job gains have remained solid in recent months.

The pace of job gains has eased this year, but we had expected some slowing after last year's strong pace.

Participation in the labor force by people in their prime working years has been increasing and wages have been rising, particularly for lower paying jobs.

People who live and work in low and middle income communities tell us that many who have struggled to find work are now getting opportunities to add new and better chapters to their lives.

This underscores for us the importance of sustaining the expansion so that the strong job market reaches more of those left behind.

We expect the job market to remain strong.

The median of participants projections for the unemployment rate remains below 4% over the next several years.

Inflation continues to run below our symmetric 2% objective.

Over the 12 months through July, total P C E inflation was 1.4% and core inflation, which excludes volatile food and energy prices, was 1.6%.

We still expect inflation to rise to 2%.

The median projection is 1.9% this year in 2% in 2021.

However, inflation pressures clearly remain muted, and indicators of longer term inflation expectations are at the lower end of their historical ranges.

We're mindful that continued below target inflation could lead to an unwelcome downward slide in longer term inflation, expectations overall, as we say in our post meeting statement, we continue to see sustained expansion of economic activity, strong labor market conditions and inflation near our symmetric 2% objective as most likely.

While this has been our outlook for quite some time, our views about the path of interest rates that will best achieve these outcomes have changed significantly over the past year.

As I mentioned, weakness in global growth and trade policy uncertainty have weighed on the economy and pose ongoing risks.

These factors, in conjunction with muted inflation pressures, have led us to shift the reviews about appropriate monetary policy over time toward a lower pass for the federal funds rate, and this shift has supported the outlook.

Of course, this is the role of monetary policy to adjust interest rates to maintain strong labor market and keep inflation near our 2% objective.

Today's decision to lower the federal funds rate target by 1/4 percent to 1.75% to 2% is appropriate in light of the global developments I mentioned as well as muted inflation pressures.

Since our last meeting, we've seen additional signs of weakness abroad and a resurgence of trade policy tensions, including the imposition of additional tariffs.

The Fed has no role in the formulation of trade policy, but we do take into account anything that could materially affect the economy relative to our employment and inflation goals.

The future course of monetary policy will depend on how the economy evolves and what developments imply for the economic outlook and risks to the outlook.

We've often said that policy is not on a preset course, and that is certainly the case today.

As I've noted, the baseline economic outlook remains positive.

The projections of appropriate policy show that persists.

Participants generally anticipate only modest changes in the federal funds rate over the next couple of years.

Of course, those views or merely forecasts and, as always, will evolve with the arrival of new information.

Let me say a few words about our about our monetary policy operations.

Funding pressures in money markets were elevated this week, and the effective federal funds rate rose above the top of its target range yesterday.

While these issues are important for market functioning and market participants, they have no implications for the economy or the stance of monetary policy.

This upward pressure emerged as funds flowed from the private sector to the Treasury to meet corporate tax payments and settle purchases of Treasury securities.

To counter these pressures, we conducted overnight repurchase operations yesterday and again today.

Thes temporary operations were effective in relieving funding pressures and we expect the federal funds rate to move back into the target range.

In addition, as we've done in the past, we made a technical adjustment to the interest rate paid on required an excessive reserve balances, setting it 20 basis points below the top of the target range for the federal funds rate.

In a related action, we also adjusted the rate on overnight on the overnight repurchase facility to five basis points below the bottom of the target range.

We will continue to monitor market developments and will conduct operations as necessary to foster trading in the federal funds market at rates within the target range.

Consistent with our decision earlier this year to continue to implement monetary policy in an ample reserves regime, we will over time provide a sufficient supply of reserves so that frequent operations are not required to summarize.

We are fully committed to pursuing our goals of maximum employment and stable prices as the committee contemplates the future path of the target range for the federal funds rate.

It will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion with a strong labor market and inflation near its symmetric 2% objective.

Thanks, I'll be happy to take your questions.

Marty cut singer with the Associated Press.

Mr.

Chairman, when you cut rates in July, you characterized it is a mid cycle adjustment.

Is that still your view of what?

What's happening?

So, um, as you can see from our from our policy statement from the S e p, we see a favorable economic outlook with continued moderate growth, a strong labor market, inflation near our 2% objective.

And by the way, that in that view is consistent with those of many other forecasters.

Um, as you can see, FOMC participants generally think that these positive economic outcomes will be achieved with modest adjustments to the federal funds rate.

At the last press conference, I pointed to two episodes in I guess, 1995 in 1998 as examples of such an approach, which was successful in both of those instances, Um, as our statement also highlights, though, there are risks to this positive outlook.

Do particularly too weak global growth and trade developments.

And if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate.

We don't see that it's not what we expect, but we would certainly follow that path became appropriate.

In other words, as we say in our statement, we will continue to monitor these developments closely, and we'll act as appropriate to help ensure that the expansion remains on track.

Really, I'm sorry, Rich Miller with Bloomberg taking the statement, your opening remarks and the Sep I'm just wondering what kind of message we should take from this.

Do you still does the FOMC Is it safe to say this FOMC still has an easing bias?

Uh or not.

So the idea of having a bias is something that was a long time practice, and we don't actually have that practice anymore, So I can't really adopt it right here, but and the less I'll respond to your question.

Um, so we did.

We made one decision today, and that decision was to lower the federal funds rate by 1/4 percentage point.

We believe that action is appropriate to promote our objectives.

Of course.

Um, we're gonna be highly data dependent.

As always, our decisions are gonna depend on the implications of incoming information for the outlook.

And I would also say, as we often do, that we're not on a preset course.

Um, so that's how we're gonna look at it.

We're going to carefully looking at economic data.

Sometimes the path ahead is some is clear and sometimes less so.

So we're gonna be looking carefully meeting by meeting, uh, at the full range of information.

And we're going to assess the appropriate stance of policy as we go in as I as I said, we we will act as appropriate to sustain expansion could just follow up.

You've also said that the favorable outlook is predicated on the financial conditions on the financial conditions are turned predicated on and outlook for Fed policy in this case further further cut.

Uh, when that suggests that, um, you should be inclined to If you want those financial conditions and that favorable I would like to come about.

You should be inclined to cut.

Well, what we do going forward is gonna is very much gonna depend Rich on on the on the flow of data and information we've seen.

You know, if you look at the things we're monitoring, particularly global growth and trade developments, global growth has continued to weaken.

I think it's weakened since since it's our last meeting, trade developments have been up and down.

And then up, I guess, or backup, Perhaps over the course of this intervening period.

In any case, they've been quite volatile.

So we do see those risks is actually more heightened.

Now, we're gonna be watching that carefully.

We're also gonna be watching the U.

S.

Data quite carefully, and we'll have to make an assessment as we go.

Thank you, Mr Chairman.

Nick Timorous, The Wall Street Journal.

Um, I know you're trying to speak for the committee when you do these press conferences, but the committee is clearly divided right now, at least about the outlook and the appropriate policy path.

Some people think you need to wait and see the labor market and the consumer crack or weaken further before acting more aggressively.

And some people think that by the time that happens, you'll need to do even more aggressive action to arrest a downturn.

Where do you stand on this?

Well, let me just say on the general point of diverse perspectives.

You're right.

Sometimes the and there've been many of those times in my now almost eight years of the Fed.

Many times in the direction is relatively clear.

It's relatively easy to reach anonymity.

This is a time of difficult judgments and, as you can see, disparate perspectives.

And as I really do think that's nothing but healthy.

And so I see a benefit in having those diverse perspectives, really So your question, though, is your own view, because the data is, to some extent lagged, especially when you have these risks on the horizon.

And the markets obviously think the's risks could materialize more than what you and your colleagues are projecting in the dot plot today.

So I wonder, where are your own views about but the tension between risk management, which implies some degree of data independence and this idea of being data dependent?

Yeah, so I'll try to try to get at that this way.

I think that the idea that if you see trouble approaching on the horizon, you steer away from it if you can.

I think that's that's a good idea In principle, I think history teaches us that it's better to be proactive in adjusting policy If you can't.

I think, um, applying that principle is situated in a particular situation is where the challenge comes.

So, um, I told you where the committee, the bulk of the committee is going meeting by meeting.

And I think the main takeaway is that this is a committee that has shifted its its policy stance repeatedly, consistently through the course of the year to support economic activity as it is felt that it's appropriate the beginning of the year we were looking at further rate increases.

Then we were patient and then we cut once.

Then we cut again.

Uh, and I think you've seen it's being willing to move based on data based on the evolving risk picture.

I have no reason to think that will change, I think, but it will continue to be data dependent and depend.

Data includes the evolving risk picture.

That's where I am, and that's where I think the bulk of the committee is Steve.

If you're Steve Leeson, CNBC, I've only done this.

It doesn't bother times, um, one of you concerned about how the Federal Reserve operated through the recent liquidity crunch in markets.

We talked to many traders who said the tax state payment was known well in advance.

There were several reports or people pointing to September as a potential crunch time.

You closed Monday at the top end of the Fed funds rate.

Tuesday came along, and there wasn't an operation until nine o'clock in no announcement until of a second operation of four o'clock in the afternoon was the Fed listening to markets well ahead of time, going back a year when they were blowouts in the overnight rate at year end, then and the turn of the year.

Are you concerned about how, for example, the New York Fed operated through this?

You know, So I would say I doubt that anyone is closer to and has more invested in carefully following the you know, the behavior of these markets.

So of course, we were well aware of the, you know, the tax payments and also of the settlement of the large bond purchases and, you know, we were very much waiting for that, but we didn't expect the The response to that was stronger than we expected.

By the way, our senses that it surprised market participants a lot, too.

People were writing about this and publishing stories about it weeks ago.

It wasn't a surprise, but it was.

It was a stronger response then, certainly than we expected.

Um, so no, I'm not concerned about about at that dance.

To your question, I could go on a little bit about how we're looking at that.

I learned I do that.

So, um uh, as I mentioned, it doesn't we don't see this is having any implications for the broader economy or for the economic outlook, nor for our ability to control rates.

The strains in the money markets reflect forces that we saw coming, and they just had a bigger effect than I think.