Investing.com -- Federal Reserve Chair Jerome H. Powell recently addressed the 2025 U.S. Monetary Policy Forum at the University of Chicago Booth School of Business. He discussed the state of the U.S. economy, monetary policy, and the ongoing review of the Federal Reserve’s policy framework.

According to Powell, the U.S. economy remains in a good place despite elevated uncertainty levels. The labor market is solid, and inflation is edging closer to the Federal Reserve’s longer-run goal of 2 percent. The Fed’s focus remains on the dual-mandate goals set by Congress: maximum employment and stable prices.

Economic growth has been steady, with GDP expanding at a 2.3 percent annual rate in the fourth quarter of last year. This growth has been supported by resilient consumer spending. However, recent indicators suggest a possible moderation in consumer spending, and surveys of households and businesses show increased uncertainty about the economic outlook. The Federal Reserve continues to monitor a variety of indicators of household and business spending.

In terms of the labor market, the jobs report released showed employers added 151,000 jobs in February, and the unemployment rate was 4.1 percent. Since September, employers have added an average of 191,000 jobs a month. The unemployment rate has remained low and stable, between 3.9 and 4.2 percent, for the past year. Wages are growing faster than inflation, and the labor market is not a significant source of inflationary pressure.

Inflation has come down from its mid-2022 peak above 7 percent without a sharp increase in unemployment. Recent readings remain somewhat above the 2 percent objective. However, progress is ongoing in categories that remain elevated, such as housing services and the market-based components of non-housing services. Data released last week showed total PCE prices rose 2.5 percent over the 12 months ending in January, and core PCE prices rose 2.6 percent.

Looking ahead, the new Administration is implementing significant policy changes in trade, immigration, fiscal policy, and regulation. The net effect of these changes will impact the economy and the path of monetary policy. Despite recent developments, especially in trade policy, uncertainty remains high.

Monetary policy is not on a preset course. If the economy remains strong but inflation does not continue to move sustainably toward 2 percent, policy restraint can be maintained for longer. If the labor market weakens unexpectedly or inflation falls more quickly than anticipated, policy can be eased accordingly.

Finally, Powell noted that the Federal Reserve has begun its second five-year review of the monetary policy framework. Changes to the consensus statement and communications will be considered as part of this review. The 2 percent longer-run inflation goal will be retained and is not a focus of the review. The review process will include outreach events around the country, a research conference in Washington in May, and is expected to conclude by late summer.

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