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- US Fed chair signals potential interest rate cuts, citing shift in economic conditions
US Fed chair signals potential interest rate cuts, citing shift in economic conditions
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According to recent statements by Jerome Powell, Chairman of the Federal Reserve, the time has come for the US to start cutting interest rates. Powell emphasized that the direction of travel is clear, but the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks. He also acknowledged recent progress on inflation, citing a weakening labor market as a factor contributing to diminishing inflation risks. The statements were met with a positive response from the stock market, with all three major indices on Wall Street experiencing a sharp increase.
The time has come for policy to adjust. The direction of travel is clear and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.
We do not seek or welcome further cooling in labor market conditions.
The cooling in labor market conditions is unmistakable.
Our objective has been to restore price stability while maintaining a strong labor market, avoiding the sharp increases in unemployment that characterized earlier disinflationary episodes when inflation expectations were less well anchored.
While the task is not complete, we have made a good deal of progress toward that outcome.
The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.
My confidence has grown that inflation is on a sustainable path back to 2%.
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