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Conceptual illustration about Federal Reserve: rates.
Fed Watch

Economic Conditions and Monetary Policy

The economy has been knocked off course on progress toward the 2 percent goal. Only two months of data have been consistent with 2 percent core PCE inflation over the past 20 months. There is no clear trend toward a timely return to 2 percent. Earlier this month the FOMC unanimously agreed to raise short-term policy interest rates. The base case is that further policy adjustments are likely to be needed so inflation comes down to target in a timely fashion. Federal Reserve.

As-of Tue 29 Sep 20261 min read
Conceptual illustration about Federal Reserve: security.
Fed Watch

Bowman Tue 29: community-bank cyber hygiene and resiliency

Vice Chair for Supervision Michelle W. Bowman gave opening remarks at the Community Bank Cyber Workshop in Denver, Colorado, via pre-recorded video. Community banks faced significant cyber events over the past year. The remarks center on cyber hygiene and resiliency. The workshop covers a tabletop exercise, AI for cyber defense and the risks of AI, the Secret Service, and the Fed Cybersecurity Analytics Support Team. The threat landscape has advanced with ransomware, business email compromise, and vendor breaches, and AI is lowering the barrier to entry and adapting attacks. Defenses begin with asset inventories, phishing-resistant MFA, identity and access controls, patch management, employee training, and incident-response testing. bowman20260929a.htm. Federal Reserve.

As-of Tue 29 Sep 20261 min read
Server room of BalticServers
Fed Watch

An Update on AI and the Economy

AI is framed as a general-purpose technology on par with or exceeding the steam engine, electricity, and the internet. Companies have spent only a small fraction of the $2 trillion in announced AI investment plans. Total inflation is estimated at 3.8 percent into August and core inflation at 3.4 percent, still above the 2 percent target. Unemployment was 4.1 percent in August and the labor market is roughly in balance. Nearly half of small employer firms are using AI, and 71 percent report increased productivity. Firms with fewer than 500 employees are more than 99 percent of U.S. firms and 61 percent of net new job creation since 1995. AI adoption is happening faster than PC or internet adoption at comparable points. In the short term AI adds inflation pressure; the medium term is labor-market transition risk; the long term is productivity optimism, with the dual mandate in view. Federal Reserve.

As-of Mon 281 min read

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