The federal funds rate holding at 3.50%-3.75% should help stabilize the labor market while helping push inflation down toward the Federal Reserve's 2% goal, Federal Reserve Chair Jerome Powell said on Wednesday at his post-decision press conference.

"We see the current policy rate as appropriate to support both of our goals," he said. The central bank will continue to make decisions on a meeting-by-meeting basis.

The comments came after the Federal Open Market Committee paused its three-cut rate easing cycle, keeping the federal funds rate target range at 3.50%-3.75%.

Powell said he attended the Supreme Court case that will decide whether President Donald Trump can remove Lisa Cook from the Federal Reserve Board. He described the case as "perhaps the most important legal case in the Fed's 113-year history… I thought I might have a hard time explaining why I didn't attend it."

The Fed chair also declined to respond further on the Department of Justice's investigation into the Federal Reserve and Powell on its renovation project. He had no further news on whether the Fed has responded to the subpoenas from the DOJ.

Furthermore, he refused to say whether he intends to stay on the board after his term as chair ends in May.

"There's a clear improvement in the outlook for growth," Powell said. "Overall, it's a stronger forecast."

The temporary effect from the government shutdown should reverse as the economy

Nonfarm payroll growth averaged 22K over the past three months, he noted. Inflation eased from highs in mid-2022 but remains elevated above the Fed's 2% goal.

Total PCE inflation rose 2.9%, and core PCE, which ex rose 3.0% over the past year, largely reflecting inflation in the goods sector.

The press conference ends at 3:17 PM ET.

3:14 PM ET: The Fed doesn't take a “strong signal” from the increase in gold and silver prices.

3:11 PM ET: His advice to his successor is not to get pulled into elected politics. Moreover, he said it's important to speak with elected officials on the Hill to gain trust.

3:08 PM ET: The way the Fed looks at geopolitical risks, most of it centers on energy and oil, Powell said. So far, the central bank "isn't seeing much."

3:05 PM ET: There's a wide range of potential effects that AI can have on the economy. "You may see, in the short term, jobs being eliminated… We just don't know what the overall effect will be," he said.

There does seem to be some connection between the low hiring for entry-level jobs and AI, but it's not the entire reason, Powell added.

3:00 PM ET: Part of the reason for the labor market softening is demand and supply have weakened at the same time. That makes it difficult to assess whether the economy is at full employment, Powell said.

2:57 PM ET: "The point of independence isn't to protect policymakers," he said. Rather, it's intended to insulate monetary policy from the political cycle. "I don't believe we've lost it (independence)," he added. "I don't believe we will."

2:55 PM ET: "The fiscal picture needs to be addressed, and it's not really being addressed," he said. The current size of the budget deficit isn't too big, but the deficit's path isn't sustainable, he added.

2:52 PM ET: "It's not anybody's base case that the next move is a rate hike," Powell said.

2:51 PM ET: Core PCE, excluding the effects of tariffs on goods, is running just above 2%, he said.

2:49 PM ET: The risks to inflation and the labor market have diminished, but he would not necessarily frame them as "balanced."

Updated at 2:46 PM ET: The Fed chair considers the current rate may be "loosely neutral or somewhat restrictive."

"Most of the overrun in goods prices is from tariffs, and that's good news," Powell said, because that means it will be a one-time price increase, not persistent inflationary pressure.