In his keynote speech to the Federal Reserve’s annual economic conference in Jackson Hole, Jerome Powell stressed that inflation, after the worst price rally in four decades, appears largely under control.
The president of the Federal Reserve USAJerome Powell, has stated that “the time has come” for start cutting your main interest rate from its 23-year high. But in a widely followed speech, Powell He did not say when the cuts would begin. of types or what their magnitude would be.
The Federal Reserve is expected to announce a modest cut in a quarter point in your reference type when you meet in mid-September coinciding with the increase that Japan made to compensate for its growing inflation and that has made international markets tremble.
“The direction forward is clear, and the timing and pace of rate cuts will depend on incoming data. The evolving outlook on the balance of risks. We will do everything we can to support a strong labor market as we continue moving towards the price stability“he declared.
In his opening speech at the Federal Reserve’s annual economic conference in Jackson Hole, Wyoming, Powell stressed that Inflation, after the worst price rally in four decades, appears largely under control.
“Our goal has been to restore the price stabilityavoiding the sharp increases in unemployment that characterized previous disinflationary episodes, when inflation expectations were less anchored. Although the task is not complete, we have come a long way towards that result,” he stated.
Inflation reached 2.5% and continues the downward trend
By the Fed’s preferred measure, inflation fell to 2.5% last month, well below its peak of 7.1% two years ago and only slightly above the bank’s 2% target. central.
The president of the Federal Reserve also said that Rate cuts should keep the economy growing and sustain hiring, which slowed last month.
Continued growth could boost vice president’s presidential campaign Kamala Harriseven as the majority of Americans declare themselves dissatisfied with the economic trajectory of the Biden-Harris administrationlargely because average prices remain well above where they were before the coronavirus pandemic.
By cutting rates, he said, “There are good reasons to think that the economy will return to 2% inflationwhile maintaining a strong labor market.
a cut of rates in mid-September, which would arrive less than two months before the presidential electionscould bring some unwanted political heat at the Fed, which is seeking to avoid becoming entangled in election-year politics.
Former President Donald Trump has argued that he should not cut rates so close to an election. But Powell has repeatedly stressed that the central bank would make its decisions of rates based purely on economic data, without taking into account the political calendar.
