Federal Reserve Watch for Sept. 23: Powell Says Monetary Policy 'Modestly Restrictive' Even as Employment Risks Have Increased

02:39 PM EDT, 09/23/2025 (MT Newswires) -- Fed Chairman Jerome Powell (voter) repeated his recent comments that the stance of monetary policy remains "modestly restrictive" and the Federal Open Market Committee is in a good position to deal with any developments of the economy, noting that downside risks to employment have increased but noting that inflation remains a concern.

Atlanta Fed President Raphael Bostic (nonvoter) said that inflation remains a concern and that the FOMC needs to "stay vigilant," following his comments a day earlier that he may not back another rate reduction this year.

Fed Vice Chair for Supervision Michelle Bowman (voter) said that the FOMC's decision to lower its target rate at its September meeting was only a first step and that a faster pace of rate reduction may be needed if the labor market deteriorates rapidly.

Recent comments of note:

(Sept. 22) Fed Governor Stephen Miran (voter) said that when non-monetary factors such as reduced immigration and Trump administration trade policy are taken into consideration, monetary policy models suggest that the federal funds rate should be in the mid-2% range rather than the current 4.00% to 4.25% range, and that that discrepancy poses a danger to labor market conditions.

(Sept. 22) St. Louis Fed President Alberto Musalem (voter) said that there could be limited room to lower rates further before policy becomes overly accommodative, cautioning against putting too much emphasis on labor market weakening at the expensive of inflation, or vice versa.

(Sept. 19) Fed Governor Stephen Miran (voter) said in an interview with CNBC that he does not see a large impact on inflation from the Trump Administration's tariffs and emphasized the slowing of the job market as a reason to cut interest rates rapidly.

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