In testimony about the Federal Reserve’s Semiannual Monetary Policy Report to the Congress, Chair Jerome Powell effectively summarized the more complex report in a few words: there is no immediate need to cut or increase interest rates.

The gross domestic product rose 2.5% in 2024. Consumer spending remained strong and corporate investment “solid” for the year, but the latter declined in the fourth quarter. The housing sector “stabilized” after mid-year weakness.

That sets the floor of a stable and growing economy. Next, the labor market. Over the last four months, the average monthly number of new jobs has been 189,000. That does include the lower-than-expected January number, but also higher-than-expected numbers for November and December. The unemployment rate was steady much of last year and dropped to 4% in January, which is low.