Federal Reserve Chair Jerome Powell spoke to nearly 400 students at Harvard University on March 30, 2026, addressing critical economic issues such as inflation and the job market.His remarks come as gas prices in the US approach an average of $4 per gallon, influenced by ongoing geopolitical tensions, particularly the Iran war.
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pbs.orgnhregister.comPowell emphasized the necessity of closely monitoring inflation expectations in light of these energy price spikes.He noted that supply shocks, like those caused by conflicts, can lead the public and businesses to anticipate sustained higher inflation."You have to carefully monitor inflation expectations because you could have a series of big supply shocks," he stated, suggesting that these expectations could become self-fulfilling.
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local10.combnnbloomberg.caDespite the current spike in energy prices, Powell indicated that there is little the Federal Reserve can do in the short term, as such shocks typically "come and go pretty quickly." He explained that monetary policy is more effective over the long term, which means immediate solutions may not be feasible.
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nhregister.combnnbloomberg.caIn addition to inflation, Powell discussed the challenging job market faced by new graduates.He pointed out that although employment rates are historically low, job creation is stagnant.In 2025, employers added fewer than 10,000 jobs per month, marking the weakest hiring outside a recession since 2002.The job market saw a positive start in January 2026 with 126,000 new jobs, but this was followed by a surprising loss of 92,000 jobs in February.
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pbs.orgnhregister.comPowell described the current economic climate as one of "low-hire, low-fire," where companies hesitate to hire new staff while also being reluctant to let go of existing employees.This environment poses particular challenges for young job seekers, who are increasingly competing with artificial intelligence for entry-level positions.Powell acknowledged that companies are waiting to better understand AI's impact before making hiring decisions.
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nhregister.comlocal10.comDespite these challenges, Powell expressed optimism about the future, citing historical trends where technological innovations have led to improved living standards and productivity.He encouraged students to invest time in mastering new technologies, stating, "In the longer term, this economy is going to give you great opportunities.Just be a little optimistic.".
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pbs.orgbnnbloomberg.caDuring the question-and-answer session, the topic of former President Donald Trump's criticisms of the Federal Reserve was notably absent.However, Powell reaffirmed the importance of the Fed's independence, stating, "It's very hard to build great democratic institutions and much easier to bring them down." This comment reflects the tension that has existed between the Fed and political figures, particularly Trump, who has urged rate cuts to stimulate borrowing.
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nhregister.comlocal10.comPowell concluded his address by emphasizing the Fed's responsibility to adhere to its dual mandate of maintaining price stability and maximum employment, cautioning against using its tools for political purposes.He advised that it is crucial to stick to the core objectives assigned to the Fed, especially during politically charged times.
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pbs.orgbnnbloomberg.caAs the US grapples with rising energy prices and a challenging job market, Powell's insights provide a critical perspective on the complexities of current economic conditions and the longer-term implications for both policy and employment.
