Accessible Version
Accessible Version
Drexel Economic Forum
Drexel University, Philadelphia, Pennsylvania
October 3, 2025
Economic Outlook and the Fed's Monetary Policy Framework
Philip N. Jefferson
Vice Chair, Federal Reserve Board
Board of Governors of the
Federal Reserve System
The views expressed here are my own and are not necessarily those of my colleagues on the Federal Reserve Board or the Federal Open Market Committee.
Road Map of Talk
- Views on Economic Outlook
- Federal Reserve's Statement on Longer-Run Goals and Monetary Policy Strategy
- Conclusion
Figure 1: Real Gross Domestic Product
Percent, annual rate
| Date | GDP Growth |
|---|---|
| 2018 | 2.1 |
| 2019 | 3.4 |
| 2020 | -0.9 |
| 2021 | 5.8 |
| 2022 | 1.3 |
| 2023 | 3.4 |
| 2024 H1 | 2.2 |
| 2024 H2 | 2.6 |
| 2025 H1 | 1.6 |
Note: Percent change from preceding period. The vertical line separates yearly GDP data from half-yearly GDP data. Annual GDP values represent Q4:Q4 comparisons, and half-year GDP values represent Q4:Q2 and Q2:Q4 comparisons. Seasonally adjusted.
Source: U.S. Bureau of Economic Analysis, Real Gross Domestic Product, retrieved from FRED, Federal Reserve Bank of St. Louis.
Figure 2: Nonfarm Job Openings/Unemployment Level
Level of openings/unemployed persons
| Date | Vacancy/Unemployment Ratio |
|---|---|
| 2022-01-01 | 1.73 |
| 2022-02-01 | 1.85 |
| 2022-03-01 | 2.02 |
| 2022-04-01 | 1.98 |
| 2022-05-01 | 1.92 |
| 2022-06-01 | 1.89 |
| 2022-07-01 | 2.01 |
| 2022-08-01 | 1.71 |
| 2022-09-01 | 1.87 |
| 2022-10-01 | 1.76 |
| 2022-11-01 | 1.79 |
| 2022-12-01 | 1.89 |
| 2023-01-01 | 1.81 |
| 2023-02-01 | 1.65 |
| 2023-03-01 | 1.64 |
| 2023-04-01 | 1.74 |
| 2023-05-01 | 1.53 |
| 2023-06-01 | 1.54 |
| 2023-07-01 | 1.45 |
| 2023-08-01 | 1.48 |
| 2023-09-01 | 1.47 |
| 2023-10-01 | 1.32 |
| 2023-11-01 | 1.39 |
| 2023-12-01 | 1.36 |
| 2024-01-01 | 1.38 |
| 2024-02-01 | 1.31 |
| 2024-03-01 | 1.25 |
| 2024-04-01 | 1.17 |
| 2024-05-01 | 1.19 |
| 2024-06-01 | 1.08 |
| 2024-07-01 | 1.06 |
| 2024-08-01 | 1.08 |
| 2024-09-01 | 1.03 |
| 2024-10-01 | 1.09 |
| 2024-11-01 | 1.13 |
| 2024-12-01 | 1.09 |
| 2025-01-01 | 1.13 |
| 2025-02-01 | 1.06 |
| 2025-03-01 | 1.02 |
| 2025-04-01 | 1.03 |
| 2025-05-01 | 1.07 |
| 2025-06-01 | 1.05 |
| 2025-07-01 | 1.00 |
| 2025-08-01 | 0.98 |
Note: Seasonally adjusted.
Source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm and Unemployment Level, retrieved from FRED, Federal Reserve Bank of St. Louis.
Figure 3: 12-Month PCE and Core PCE Inflation
12-month percent change
| Date | PCE inflation | Core PCE inflation |
|---|---|---|
| 2022-01-01 | 6.3 | 5.4 |
| 2022-02-01 | 6.5 | 5.6 |
| 2022-03-01 | 6.9 | 5.6 |
| 2022-04-01 | 6.7 | 5.3 |
| 2022-05-01 | 6.8 | 5.2 |
| 2022-06-01 | 7.2 | 5.3 |
| 2022-07-01 | 6.8 | 5.1 |
| 2022-08-01 | 6.6 | 5.4 |
| 2022-09-01 | 6.7 | 5.6 |
| 2022-10-01 | 6.5 | 5.5 |
| 2022-11-01 | 6.0 | 5.2 |
| 2022-12-01 | 5.5 | 5.0 |
| 2023-01-01 | 5.5 | 4.9 |
| 2023-02-01 | 5.2 | 4.9 |
| 2023-03-01 | 4.4 | 4.8 |
| 2023-04-01 | 4.5 | 4.8 |
| 2023-05-01 | 4.0 | 4.7 |
| 2023-06-01 | 3.3 | 4.4 |
| 2023-07-01 | 3.4 | 4.3 |
| 2023-08-01 | 3.4 | 3.8 |
| 2023-09-01 | 3.4 | 3.7 |
| 2023-10-01 | 3.0 | 3.5 |
| 2023-11-01 | 2.8 | 3.3 |
| 2023-12-01 | 2.8 | 3.1 |
| 2024-01-01 | 2.7 | 3.2 |
| 2024-02-01 | 2.7 | 3.1 |
| 2024-03-01 | 2.9 | 3.1 |
| 2024-04-01 | 2.8 | 3.0 |
| 2024-05-01 | 2.7 | 2.8 |
| 2024-06-01 | 2.5 | 2.8 |
| 2024-07-01 | 2.6 | 2.8 |
| 2024-08-01 | 2.4 | 2.9 |
| 2024-09-01 | 2.3 | 2.8 |
| 2024-10-01 | 2.5 | 3.0 |
| 2024-11-01 | 2.6 | 3.0 |
| 2024-12-01 | 2.7 | 3.0 |
| 2025-01-01 | 2.6 | 2.8 |
| 2025-02-01 | 2.7 | 3.0 |
| 2025-03-01 | 2.4 | 2.7 |
| 2025-04-01 | 2.3 | 2.6 |
| 2025-05-01 | 2.5 | 2.8 |
| 2025-06-01 | 2.6 | 2.8 |
| 2025-07-01 | 2.6 | 2.9 |
| 2025-08-01 | 2.7 | 2.9 |
Note: PCE inflation is the change in the personal consumption expenditures price index and core PCE inflation is the change in PCE price index excluding food and energy. PCE and core PCE are 12-Month inflation percentages calculated using seasonally adjusted annual rates.
Source: U.S. Bureau of Economic Analysis, Personal Consumption Expenditures: Chain-type Price Index and Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index), retrieved from FRED, Federal Reserve Bank of St. Louis.
Figure 4: Components of Core PCE Inflation
12-month percent change
| Date | Core goods | Core services less housing | Housing services |
|---|---|---|---|
| 2022-01-01 | 6.9 | 5.0 | 4.0 |
| 2022-02-01 | 7.7 | 5.0 | 4.3 |
| 2022-03-01 | 7.5 | 5.0 | 4.6 |
| 2022-04-01 | 6.4 | 5.0 | 4.9 |
| 2022-05-01 | 5.7 | 4.9 | 5.2 |
| 2022-06-01 | 5.7 | 5.0 | 5.6 |
| 2022-07-01 | 5.5 | 4.6 | 6.0 |
| 2022-08-01 | 5.6 | 4.9 | 6.5 |
| 2022-09-01 | 5.7 | 5.2 | 6.9 |
| 2022-10-01 | 4.7 | 5.3 | 7.1 |
| 2022-11-01 | 3.9 | 5.1 | 7.4 |
| 2022-12-01 | 3.2 | 4.9 | 7.8 |
| 2023-01-01 | 2.7 | 5.1 | 8.0 |
| 2023-02-01 | 2.3 | 5.0 | 8.2 |
| 2023-03-01 | 2.5 | 4.8 | 8.2 |
| 2023-04-01 | 2.5 | 4.8 | 8.3 |
| 2023-05-01 | 2.5 | 4.7 | 8.2 |
| 2023-06-01 | 1.7 | 4.5 | 7.9 |
| 2023-07-01 | 1.2 | 4.7 | 7.7 |
| 2023-08-01 | 0.6 | 4.2 | 7.4 |
| 2023-09-01 | 0.2 | 4.2 | 7.1 |
| 2023-10-01 | 0.4 | 3.8 | 6.9 |
| 2023-11-01 | 0.2 | 3.6 | 6.7 |
| 2023-12-01 | 0.0 | 3.5 | 6.4 |
| 2024-01-01 | -0.5 | 3.9 | 6.2 |
| 2024-02-01 | -0.4 | 3.7 | 5.9 |
| 2024-03-01 | -0.5 | 3.9 | 5.9 |
| 2024-04-01 | -0.5 | 3.8 | 5.7 |
| 2024-05-01 | -1.0 | 3.6 | 5.6 |
| 2024-06-01 | -0.8 | 3.5 | 5.4 |
| 2024-07-01 | -0.4 | 3.5 | 5.3 |
| 2024-08-01 | -0.5 | 3.6 | 5.3 |
| 2024-09-01 | -0.3 | 3.5 | 5.1 |
| 2024-10-01 | -0.4 | 3.9 | 5.1 |
| 2024-11-01 | -0.2 | 3.8 | 4.8 |
| 2024-12-01 | -0.2 | 3.9 | 4.7 |
| 2025-01-01 | 0.2 | 3.4 | 4.5 |
| 2025-02-01 | 0.3 | 3.7 | 4.3 |
| 2025-03-01 | 0.0 | 3.3 | 4.3 |
| 2025-04-01 | 0.2 | 3.2 | 4.2 |
| 2025-05-01 | 0.6 | 3.3 | 4.1 |
| 2025-06-01 | 1.0 | 3.2 | 4.1 |
| 2025-07-01 | 1.1 | 3.3 | 3.9 |
| 2025-08-01 | 1.1 | 3.4 | 3.9 |
Note: Core goods inflation is the change in the personal consumption expenditures (PCE) price index excluding energy and food. Core services inflation is the change in the PCE price index excluding energy services.
Source: U.S. Bureau of Economic Analysis.
Figure 5: Federal Funds
Percent
| Date | Fed Funds Monthly Average Rate |
|---|---|
| 2022-01-01 | 0.08 |
| 2022-02-01 | 0.08 |
| 2022-03-01 | 0.20 |
| 2022-04-01 | 0.33 |
| 2022-05-01 | 0.76 |
| 2022-06-01 | 1.19 |
| 2022-07-01 | 1.65 |
| 2022-08-01 | 2.33 |
| 2022-09-01 | 2.58 |
| 2022-10-01 | 3.08 |
| 2022-11-01 | 3.76 |
| 2022-12-01 | 4.09 |
| 2023-01-01 | 4.33 |
| 2023-02-01 | 4.57 |
| 2023-03-01 | 4.65 |
| 2023-04-01 | 4.83 |
| 2023-05-01 | 5.05 |
| 2023-06-01 | 5.08 |
| 2023-07-01 | 5.12 |
| 2023-08-01 | 5.33 |
| 2023-09-01 | 5.33 |
| 2023-10-01 | 5.33 |
| 2023-11-01 | 5.33 |
| 2023-12-01 | 5.33 |
| 2024-01-01 | 5.33 |
| 2024-02-01 | 5.33 |
| 2024-03-01 | 5.33 |
| 2024-04-01 | 5.33 |
| 2024-05-01 | 5.33 |
| 2024-06-01 | 5.33 |
| 2024-07-01 | 5.33 |
| 2024-08-01 | 5.33 |
| 2024-09-01 | 5.13 |
| 2024-10-01 | 4.83 |
| 2024-11-01 | 4.65 |
| 2024-12-01 | 4.48 |
| 2025-01-01 | 4.33 |
| 2025-02-01 | 4.33 |
| 2025-03-01 | 4.33 |
| 2025-04-01 | 4.33 |
| 2025-05-01 | 4.33 |
| 2025-06-01 | 4.33 |
| 2025-07-01 | 4.33 |
| 2025-08-01 | 4.33 |
| 2025-09-01 | 4.23 |
Source: Federal Reserve Bank of New York.
Statement on Longer-Run Goals and Monetary Policy Strategy
“The Committee’s monetary policy strategy is designed to promote maximum employment and stable prices across a broad range of economic conditions.”
Source: Federal Reserve Board
Four Adjustments
- A shift away from a focus on the effective lower bound
- Embraces flexible inflation targeting at all times
- A refinement of how we consider maximum employment
- Clarity on how we approach periods when employment and inflation objectives are not complementary
Notable Continuity
- Explains how we interpret the dual mandate from Congress
- States monetary policy must be forward looking
- Maintains our commitment to a 2 percent inflation objective
- Committed to conducting a public review roughly every five years