Fed Chair Jerome Powell: Best thing we can do for affordability is keep inflation at 2%

• Consumer spending is uneven, with higher-income households benefiting from asset value increases, while lower-income consumers are economizing due to persistent inflation.
• The Fed's primary objective is price stability, and bringing inflation back to 2% is crucial for improving affordability for all households.
• Powell stated that the U.S. federal budget deficit is 'uncontroversially on an unsustainable path' and that growth in labor supply has halted due to a 'very sudden stop in immigration'.
• AI is expected to both eliminate and create jobs, with technology historically increasing productivity and wages over time, though short-term disruptions are possible.

Fed Chair Jerome Powell discussed uneven consumer spending, noting that higher-income households are driving the economy while lower-income consumers struggle with affordability due to rising prices. He reiterated the Fed's commitment to achieving price stability by bringing inflation down to 2%. Powell also highlighted concerns about the unsustainable U.S. federal budget deficit and the halt in labor supply growth due to immigration, while acknowledging AI's potential long-term impact on productivity and jobs.