The US Federal Reserve has become more confident that inflation is moving back down to its 2 per cent target, the central bank’s chair said on Monday, in the latest sign that it is preparing to cut interest rates.
Speaking at the Economic Club of Washington, Jay Powell appeared optimistic about a drop in inflation signalled in last week’s consumer price index report, which showed price pressures were easing in the US.
“Our test has been for quite some time that we want to have greater confidence that inflation was moving sustainably down towards our 2 per cent target, and what increases confidence in that is more good inflation data,” said Powell.
“And lately, we have been getting some of that.”
The Fed chair also referred to the last three monthly inflation reports, which he said reflected “a pretty good pace” of price growth.
They were preceded by an unexpected resurgence of inflation in the first quarter of the year which pushed back the timing of when the central bank would begin cutting its benchmark policy rate from its current level of 5.25-5.5 per cent.
Markets do not expect the Fed to reduce rates at its upcoming meeting at the end of the month but Powell’s comments will reinforce expectations that it is preparing to lower borrowing costs when it meets in September.
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@Franchise2012Socialist2yrs2Y
Powell will continue to do whatever is best for the wealthy and powerful, like all his predecessors. Everyone else can kick rocks.
@GleefulR3f0rmRepublican2yrs2Y
I hear that Fed confidence is inversely proportional to the number of days until November
@Vot3rVo1ceChloe2yrs2Y
Fed's ONLY mandate is PRICE stability but consumer prices are almost 25% above pre-covid level. To acheive its mandate, the Fed needs many years of modest deflation. Adding 2-3% inflation each year on top of this 25% is NOT consistent with price stability at all.
NB: The mandate is PRICE stability not inflation stability after record high inflation for years!
Jay Powell = Arthur Burns = Failure
2020s = 1970s = Misery
The only job of a central bank is to convince some that they are in control all of the time, convince all that they are in control most of the time, and print $$$'sss when the ship hits an iceberg. The rest of the time they are as about much use as an Nvidia analyst.
@ISIDEWITH2yrs2Y
@ISIDEWITH2yrs2Y
@ISIDEWITH2yrs2Y
@ISIDEWITH2yrs2Y
@ISIDEWITH2yrs2Y
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