In support of our goals and in light of the balance of risks to employment and inflation. Today, the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point. We also decided to conclude the reduction of our aggregate securities holdings as of December 1. I will have more to say about monetary policy after briefly reviewing economic developments. Available indicators suggest that economic activity has been expanding at a moderate pace. GDP rose at a 1.6% pace in the first half of the year. down from 2.4% last year. In the labor market, the unemployment rate remained relatively low through August. Job gains have slowed significantly since early or in the year. A good part of the slowing likely reflects a decline in the growth of the labor force. due to lower immigration and labor force participation. The Labor Demand has clearly softened as well. although official employment data for September are delayed. Available evidence suggests that both layoffs and hiring remain low. and that both households perceptions of job availability. and firm's perceptions of hiring difficulty. continue to decline. In this less dynamic and somewhat softer labor market, the downside risks to employment appear to have risen in recent months. inflation has ease significantly from its highs in mid-2022. But remains somewhat elevated relative to our. 2% longer on goal. estimates based on the consumer price index. suggest that total PCE prices rose 2.8% over the 12-month sending in September. and then. Thank you. excluding the volatile food and energy categories. Core PCE prices rose to 0.8% as well. These rings are higher than earlier in the year, as inflation for goods has picked up. In the near term, risks to inflation are tilted to the upside. and risks to employment to the downside. a challenging situation. There is no risk-free path for policy, as we navigate this tension between our employment and inflation goals. Our framework calls for us to take a balanced approach in promoting. both sides of our dome mandate. With downside risks to employment having increased in recent months, the balance of risks has shifted. Accordingly, we judged it appropriate at this meeting to take another step toward a more neutral policy stance. With today's decision, we remain well positioned to respond in a timely way. potentially economic developments. We will continue to determine the appropriate stance of monetary policy. Based on the incoming data, the evolving outlook. and the balance of risks. We'll continue to face two sided risks. in the committee's discussions at this meeting. There were strongly differing views about how to proceed in December. a further reduction in the policy rate at the December meeting. is not a foregone conclusion.

Policy is not on a preset course. And today's meeting, the committee also decided to conclude the reduction of our aggregate securities holdings as of December 1. Our long-stated plan has been to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions. signs have clearly emerged that we have reached that standard. We had dumb. you know just say this uh 19 participants on the committee. Everyone works very hard at this and takes their obligations to serve the American people very seriously. and at a time when we have tension between our... We're two goals. we have you know, strong views across the committee. And as I mentioned, They were strongly different views today and The takeaway from that is that we haven't made a decision about December. and we're going to be looking at the data that we have. have it affects the outlook and the balance of risks. I guess I would say it this way. Once again, I would just... point out that we have. situation where The risks are to the upside for inflation and to the downside for employment. We have one tool, it can't do both of those. You can't address both of those once. You've got a very different situation. So... you have some people have different forecasts, right? So they'll... They don't feel it, they don't feel it. You'll forecast faster or slower progress on one of the other. And they also have different levels of risk of version. and you know people. It will be more of verse 2. inflation. overruns and some will be more versed too. under run some employment. and so you put that together. and as you can see from the SCP and from the public discussion that goes on between the meetings when Yeah, more participants go out and talk. They were very disparate views, and they were reflective in strongly differing views in today's meeting, as I pointed out in my remarks. and that's what leaves me to say that. you know that. haven't made a decision. about December, you know, I always say that it's a fact that We don't make decisions as advanced, but this is something in addition here. is that it's not to be seen as a foreground conclusion in fact far from it.