Jerome Powell on US Fed's Plans for Rate Cuts and Managing Inflation

Jerome Powell on Rate Cuts Timing

In his address today, Jerome Powell, Chair of the US Fed, indicated that while the US economy is in solid shape, there is no rush to implement rate cuts. Powell emphasized that the Fed will adjust its strategies based on real-time data about the economy and inflation.

Inflation Trends and Economic Conditions

The US Fed continues to monitor inflation closely. According to Powell, the goal remains to reach the Fed’s 2% inflation target. Recent data supports this, showing a moderate rise in the personal consumption expenditures price index of 2.2% on a 12-month basis.

• Labor Market Observations: The labor market remains robust, but Powell acknowledged a cooling trend.
• Future Rate Cuts: Projections indicate quarter-point cuts may occur in the upcoming meetings, but these are contingent on economic conditions.

Cautious Optimism for Policy Adjustments

While there might be potential cuts of up to 75 basis points by the end of the year, Powell reassured that any adjustments will be made carefully to avoid triggering inflation again. The Fed's commitment is towards establishing a balanced economic climate.

Looking Ahead

Powell's address today emphasized a measured approach to rate cuts, promoting gradual adjustment based on economic indicators rather than pre-determined paths.