From CNBC: 2024-08-23 10:33:33

Federal Reserve Chair Jerome Powell hinted at upcoming interest rate cuts, citing the need for policy adjustments. Powell emphasized that the timing and extent of these cuts will depend on incoming data and economic trends. The speech follows significant progress on inflation, allowing the Fed to focus on employment stability.

Inflation has been steadily decreasing, with the rate currently at 2.5%. The unemployment rate has risen to 4.3%, attributed to more people entering the workforce. Markets anticipate rate cuts starting in September, supported by Fed officials. Powell also discussed the surge in inflation and the Fed’s response to prevent a recession.

Powell reflected on the rise in inflation, initially dismissed as temporary, which led to a series of rate hikes. The inflation surge was due to factors like increased demand, strained supply chains, tight labor markets, and commodity price hikes. The Fed’s commitment to restoring price stability was instrumental in anchoring inflation expectations and preventing a sharp downturn.

Read more: ‘The time has come for policy to adjust’