With a strong labor market and inflation near it's 2% objective, I'd like to take a step back and review had the changing economic and financial picture brings us to today's decision.

So far this year, the economy has performed reasonably well with solid fundamentals, supporting continued growth and strong employment.

Inflation has been running somewhat below our objective, but we've expected it to pick up, supported by solid growth in a strong job market.

Along with this favorable picture, we've been mindful of some ongoing cross currents, including trade developments and concerns about global growth.

At the time of our last FOMC meeting, which ended on May 1, there was tentative evidence that these cross currents were moderating.

The latest data from China and Europe were encouraging and there were reports of progress in trade.

Negotiations with China are continued.

Continued patient stance seemed appropriate in the Cup in committee saw no strong case for adjusting our policy rate.

In the weeks since our last meeting, the cross currents have re emerged.

Growth indicators from around the world have disappointed on net raising concerns about the strength of the global economy, apparent progress on trade turned to greater uncertainty and our contacts in business and agriculture.

Report heightened concerns over trade developments.

These concerns may have contributed to the drop in business confidence in some recent surveys and maybe starting to show through two incoming data.

Risk sentiment in financial markets has deteriorated as well.

Against this backdrop, inflation remains muted.

While the baseline outlook remains favorable.

The question is whether these uncertainties will continue to weigh on the outlook and this call for additional monetary policy accommodation.

Many FOMC part participants now see that the case for somewhat more accommodative policy has strengthened.

Let me explain the basis for this judgement.

Starting with the outlook for jobs and growth, participants see unemployment remaining low this year and next.

Monthly job gains in May were lower than expected, however, and in light of recent developments, this bears watching.

Still, many labor market indicators remain strong.

Community, business and labor leaders all tell us that the prospects for job seekers have seldom been better, and that this is true even for those who have traditionally struggled to find work.

Wages are rising, and this is particularly so for lower paying jobs.

Committee participants, growth projections from 2019 or little revised from March, with a central tendency of 2 to 2.2% just above their estimates of longer run normal growth.

The growth projections for the year as a whole mask some important details about the composition of growth.

Annual growth will be boosted by the surprisingly strong first quarter, which had just been reported at the time of the May FOMC meeting.

As I noted them, the unexpected strength was largely in net exports and inventories, components that are not generally reliable indicators of ongoing momentum, the more reliable drivers of growth in the economy or spending on consumption and business investment.

While consumption was weak in the first quarter, incoming data show that has it has bounced back and is now running at a solid pace.

In contrast, the limited evidence available at this time suggests that growth in business fixed income has slowed in the second quarter.

Moreover, manufacturing production has posed to decline so far this year.

Thus, while the baseline outlook remains favorable, many FOMC participants slated the investment picture and weaker business sentiment and the cross currents.

I mentioned earlier as supporting their judgment that the risk of less favorable outcomes has risen.

After running close to our symmetric 2% objective for most of last year, inflation declined in the first quarter.

Data since then show some pickup participants broadly see inflation moving back up toward our 2% objective, but at a slower pace than had been expected.

The central tendency for 2019 core inflation, which emits volatile food and energy components, is between 1.7 and 1.8% setting aside short term fluctuations.

Committee participants expressed concerns about the pace of inflation's return to 2%.

Wages are rising as noted above, but not at a pace that would provide much upward impetus to inflation.

Moreover, we could blow weaker global growth may continue to hold inflation down around the world.

We are firmly committed to our symmetric 2% inflation objective, and we are well aware that inflation weakness that persists even in a healthy economy could precipitate a difficult to arrest downward drift in longer run inflation expectations.

Because there are no definitive measures of inflation expectations, we must rely on in perfect proxies.

Market based measures of inflation compensation have moved down since arm A meeting and some survey based expectations.

Measures are near the bottom of their historic ranges, combining these factors with the risks to growth.

Already noted, participants expressed concerns about a more stain sustained shortfall of inflation.

Overall, our policy discussions focused on the appropriate response to the uncertain environment.

The projections of appropriate policy show that many participants believe that some cut in the federal funds rate will be appropriate in the scenario that they see as most likely, though, some participants wrote down policy cuts and others did not of deliberations made clear that a number of those who wrote down a flat rate path agree that the case for additional accommodation has strengthened since our main meeting this an atomic accommodation would support economic activity and inflation's return to our objective.

Uncertainties surrounding the baseline outlook have clearly risen since our last meeting.

It's important, however, that monetary policy not overreact to any individual data point or short term swing in sentiment.

Doing so would risk adding even more uncertainty to the outlook.

Thus, my colleagues and I will be looking to see whether these uncertainties will continue to weigh on the outlook and we will use our tools as appropriate to sustain the expansion.

Thank you.

I will be pleased to take your questions.

Nick Timiraos of the Wall Street Journal.

Chair Powell, Did you consider a rate cut today?

Specifically, Was it one of the options, The policy options in the teal book?

And is the committee considering moving?

Given all of the uncertainty you addressed moving.

It's changing its policy before the next meeting.

Um, so the committee had, you know, our usual long discussion of global on domestic economic and financial conditions, Uh, and then spent this morning talking about monetary policy.

And, um, I came to the view that that I expressed to you, which is that, um, uh, we're gonna be monitoring, monitoring the cross currents and the other items that we've mentioned, but that we'd like to see more going forward, particularly.

We'd like to see whether these risks continued away on the outlook.

So, um, generally, uh, as I mentioned, many on the committee do see a strength in case eight of those strength in case for cutting rates, eight actually wrote down rate cuts.

A number of others see that the case is strengthened, but the committee wanted to wanted to see Maura's I mentioned.

And, um, I also mentioned that some of these some of these developments have been quite recent vintage.

And so we do expect that will be learning a lot more on all of these issues in the near term.

And and that's our focus.

Do you think something could change before the next meeting?

I'm sure that things will change before the next meeting.

I expect a full range of data and information on all of these issues that we are looking at.

I think we'll learn a great deal more about them.

And I think that's, uh, we think that that's the right way to move here again.

Many of these developments happen, you know, part of the way through the last intervening period.

Only seven weeks ago, we had a great jobs report and came out of the last FOMC meeting feeling that the economy and our policy was in a good place.

So, um, we want to see we want to see and we want to react to developments, uh, and trends that air sustained that are that are genuine and not react just to data points or just to changes in sentiment, which which can, which can be volatile.

At the same time, we're quite mindful of the risks to the outlook and are prepared to move and use our tools as needed to sustain the expansion.

Mr.

Chairman.

Steve Weissman, CNBC Could you walk us through your thinking about trade?

It was really the threat of tariffs against Mexico that caused at least the market to become definitively bank your pricing in rate cuts.

If, for example, there's a deal with China, does that take the possibility of rate cuts off the table?

Yeah, so I would say that we're not looking at any any one thing.

I guess I would start by agreeing with your premise that news about trade has been an important driver of sentiment in the inter meeting period.

But we're also looking at global growth.

It's really trade developments and concerns about global growth that that are on our minds.

Um, so we're not exclusively focused on one event or one piece of data.

Risks seem to have grown.

In the meantime, we have incoming data in the United States that's been pretty good, particularly for the consumer.

Consumer spending is solid, supported by you know, healthy job market, high levels of employment, wages going up.

We do see those Some areas that we're looking at, such as I mentioned business, fixed income.

So, um, also the prolonged short short fall in inflation and perhaps job growth.

We don't like to look at one job report.

We like to average over three or six months, but still, that bears watching.

So we'll be monitoring the implications of all of those developments for the U.

S.

Economic outlook.

We expect to learn a good deal more, as I mentioned, and we'll be asking the question whether those risks are gonna continue the way on the outlook and then in the end, will use our tools as appropriate to to sustain this long expansion.

I, Heather long from The Washington Post.

Could you clarify what you would do if the president tweets or calls you to say he would like to demote you as Fed chair?

I am.

I think the law is clear that I have a four year term and I fully intend to serve it.

You know, hide your pal.

I was hoping that this is genius.

My look from the New York times.

I was hoping that you could clarify for us a little bit how you're thinking about the risks of waiting too long to cut rates versus the risks of cutting rates prematurely, Um, sort of what the balance of risks are and how you talk about that, right?

So we're always trying to balance that risk.

But I would say that given the quite recent nature of some of the events, I think the committee felt, though, that the right thing to do was to wait and Seymour and we will see a lot more on all of these issues in the very near term.

So I don't think the risk of waiting too long is prominent Right now, I would say is a general matter.

It's always something that way have to weigh.

But I think we believe that that the right thing here is to is to watch carefully in the near term and see how these risks unfold and see whether they continued away on the outlook.

Obviously, which we try to avoid going prematurely as well.

In this case, you know, there's always some judgment in these things, but I would just say that that The risks that we see having emerged, uh, are are risks that have gotten our attention and that have called a number of us to write down rate cuts and a number of those who haven't to see that the case of strengthened Marty Marty quit singing with the AP.

You had your first descent in your time is chairman.

Does that give us a sense that there was debate about among a group it was pushing for a rate cut this time?

And how do you do you expect further Descents going forward?

Let me say the same thing as I, as I said the last time before their advantage of sense and that is that I think the process of careful, thoughtful dissent is very healthy.

One and I've always believed that.

And I feel like you make better decisions when you hear a disparity of you.

So I, uh, I really do look at it that way.

I would add, though, that the support for the path we took for the the policy statement that we adopted was was quite broad.

James James pleaded with the Financial Times Mario Draghi at the CB yesterday sent us strong signal of new stimulus for the eurozone.

Do you think that such actions tease policy at other central banks around the world will put more pressure on the Fed to do the same?

Well, first, I think all central banks are focused on their domestic meant.

Their mandates are domestic and therefore focused on economic conditions from a domestic standpoint.

And that goes for the European Central Bank goes for the Fed.

It goes for all central banks.

So that's that's our principal focus.

Um, so it could cut either way, you know, I would think that extent you see stronger financial conditions and stronger activity in the C B after a rate cut that would that would support tend to support activity.

So we're really focused on, uh, you know, the risks to our on the baseline outlook, which is still a pretty favorable one.

And what and the risks to those outlooks That's that's our principal focus.

This is the first time that you've been really issuing steps in the narrow when rates are gonna be going down to sort of related questions.

Is there concern that you'll be causing a sort of dot deflation by telling people Well, don't buy your car now because it will get cheaper in six months because we're cutting rates and that that could sort of fulfill itself.

And secondly, on inflation, that was a pretty big drop in expected PC yet, you know, without reacting to it, are you not sort of undermining your incredible D In terms of commitment to the 2% target, I'll take the inflation.

When first I didn't quite follow your DOD question.

The fact that expected inflation went from 1.8 What Howard shine with words went from 1.8 to 1.5.

That's the fact that you're not responding that inflation question.

Yes, I'm saying you on Dief?

No.

The fact that you signaled rate cuts are coming.

Is was there any concern on the committee that this would tell consumers Tell people, don't borrow now.

Don't spend now, because I see you later.

Um, okay, so let me let me answer the inflation question for so we're saying that we know I noted in the statement, and also in my mind what I said here we saw that market based measures of inflation expectations breakevens dropped.

We noted that also in in this statement, and I noted it as a reason for us to one of one of several reasons why, why it feels to us that the case for more accommodation has strengthened.

So we find that notable.

Not only that, the actual forecast for inflation for this year among FOMC FOMC participants dropped a couple of tents.

So that means the more prolonged shortfall of inflation, let me say on inflation.

Um, it's, uh, it's something I've been concerned about for quite a long time.

It's one of the principal reasons why I called for the review in a world where, where where policy rates are going to be closer to the effect of Lower bound, then just as a general matter, we need to be really strong on 2% inflation.

So I think, uh, you know, we certainly don't want to be seen as weak on inflation in it.