Fed Meeting, Jobs Report, Inflation: What You Need To Know

It was a big week for the Federal Reserve and economic data. January's job report came in much hotter than expected. Jerome Powell signaled that the Federal Reserve would not be issuing any rate cuts until at least this March. The economy continues to grow while inflation remains steady.  So what does all this recent economic data mean for investors? Yahoo Finance spoke to analysts and experts across the industry on the state of the U.S. economy. Interest Rates remain steady (00:00:32): Jerome Powell poured cold water on any hopes that interest rate cuts would soon be implemented. After the Federal Reserve meeting this Wednesday, chairman Powell believes he needs to see more positive economic data before any interest rate cuts. Yahoo Finance's Jennifer Schonberger explains: "It's not that he needs to see better data, he just needs to see more data. We've had six months of inflation around 1.9% as measured by their favorite inflation gauge PCE. He is going to need to see more months of that data to feel confident to begin cutting."  Positive Economic Outlook (00:01:13): The markets rallied after Jerome Powell's press conference, after the Fed chair stated that he and the committee have seen much positive economic data. Yahoo Finance's Josh Schafer explains: "One of the key things to focus on here is not necessarily what Powell said about rate cuts, but what he said about the economy. He said 'we feel like inflation is coming down, growth has been strong, the labor market has been strong'. The Federal Reserve chair is saying that the economy is pretty good, and we are not that worried about it anymore. In a sense economic news can be good news again, and when the economy is doing well that means companies are doing well."  Red Hot Jobs Report! (00:02:04): The January Jobs Report came in almost double what was expected with nonfarm payrolls coming in at 353K over an estimated 185K. The Unemployment rate remained steady at 3.7% and average hourly earnings YoY came in at 4.5%. The red hot print is more of a sign that the U.S. economy is continuing to grow and seems to be steering away from the previously predicted recession. With the better than expected job numbers, Yahoo Finance's Brad Smith questions: "What will the Fed do not only in March but also now in May. Does it cast into question once again whether or not there will actually be a cut that comes forward in May? If you have got a Fed that is willing to hang its hat on the employment situation and continue combatting inflation." Video Highlights: (00:00:05) Josh Schafer, Yahoo Finance – Inflation Chartbook (00:00:32) Jerome Powell & Fed's decision to keep rates the same at 5.5% (00:01:14) Josh Schafer, Yahoo Finance – Fed decision shows positive news for U.S. economic growth (00:01:42) Brian Rehling, Wells Fargo Investment Institute – Positive U.S. economy is being driven by labor and job growth  (00:02:04) Seana Smith & Brad Smith, Yahoo Finance – January Job numbers crush estimates (00:02:44) Jennifer Lee, BMO Senior Economist – Job numbers & inflation data shows evidence that U.S. economy will avoid a recession