Jerome Powell, the Chair of the Federal Reserve, during a press conference on December 10, 2025. He gave his remarks to the media immediately following this latest Federal Open Markets Committee conclave. His remarks came amid growing concerns over the U.S. economy as two major economic data releases indicated potential challenges ahead.
In November, the unemployment rate jumped to 4.6%, up from 4.4% in September. This is the largest amount we’ve reached since 2021. While this is a marked increase, unemployment is still low by historical standards. The labor market slowed its pace with just 64,000 jobs added in November—a significant drop from September’s 119,000 jobs revised downward. This continuing very disturbing trend on employment creation causes us to question the sustainability of this economic recovery.
Consumer spending, which makes up about two-thirds of U.S. economic activity, has been a notable area of caution. This comes in the wake of a recent retail sales report indicating that consumers are drastically reducing their spending. It would be a big change in terms of economic momentum.
In light of these trends, Powell emphasized the dilemma facing policymakers. They’re attempting to thread the needle between maximum employment and stable prices.
“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals.” – Federal Reserve Chair Jerome Powell
Inflation has increased over recent months, leading to heightened scrutiny of price stability. In September, retail coffee prices jumped almost 19% compared to September 2022. Meanwhile, beef prices skyrocketed by roughly 15%. Egg prices have fallen almost 5%. This modification brings to light the complex and contradictory inflationary pressures that commodities, especially non-energy goods, are experiencing.
Interest rates peaked at all-time highs in 2023 but have since experienced a remarkable decline. Despite this, borrowing costs are still high compared to the near-zero rates experienced at the beginning of the COVID-19 pandemic. This perfect storm only adds to the burden on consumers and businesses as they deal with increased costs and shrinking pocketbooks.
We all know that the Federal Reserve’s decision-making process has grown more complicated as it considers new monetary policy measures down the road. With both inflationary pressures and unemployment on the rise, Powell’s comments signal an awareness that neither goal should be pursued blindly at the cost of the other. This could require policymakers to look beyond just the lagging economic indicators. This new assessment will help them determine which strategies will do the most to keep the U.S. economy humming.
