Federal Reserve Chairman Jerome Powell said Wednesday that central bank forecasts for the path of interest rate cuts don't imply an urgent process.
“There’s nothing in the (Summary of Economic Projections) that suggest the Committee is in a rush to get this done," Powell said in reference to how fast the central bank is likely to cut rates. But he added in his press conference following the latest Fed meeting that the data will drive monetary policy choices and rate cuts will happen faster or slower as needed.
He added that the US central bank is increasingly confident that strength in the jobs market can be maintained with an "appropriate recalibration" of policy.
"Our economy is strong overall and has made significant progress toward our goals over the past two years."
Powell said that he doesn't believe the central bank waited too long to cut its interest rate target, emphasizing that they do not think they are behind in addressing the need for rate cuts given the current outlook.
He noted that their patience with monetary policy has been beneficial, contributing to a significant decline in inflation.
Regarding lowering inflation pressures, Powell stated that while inflation has clearly eased, he is not ready to declare that price pressures have definitively cooled. "We are not saying mission accomplished or anything like that" when it comes to getting inflation back to 2%, Powell said. "But I have to say we're encouraged by the progress that we have made" on getting inflation back to the target, he said.
He added that this situation does not influence their decision to stop the balance sheet runoff, as both the reduction in the balance sheet and potential rate cuts can occur simultaneously, representing different forms of normalization.
“There’s nothing in the (Summary of Economic Projections) that suggest the Committee is in a rush to get this done," Powell said in reference to how fast the central bank is likely to cut rates. But he added in his press conference following the latest Fed meeting that the data will drive monetary policy choices and rate cuts will happen faster or slower as needed.
He added that the US central bank is increasingly confident that strength in the jobs market can be maintained with an "appropriate recalibration" of policy.
"Our economy is strong overall and has made significant progress toward our goals over the past two years."
Powell said that he doesn't believe the central bank waited too long to cut its interest rate target, emphasizing that they do not think they are behind in addressing the need for rate cuts given the current outlook.
He noted that their patience with monetary policy has been beneficial, contributing to a significant decline in inflation.
Regarding lowering inflation pressures, Powell stated that while inflation has clearly eased, he is not ready to declare that price pressures have definitively cooled. "We are not saying mission accomplished or anything like that" when it comes to getting inflation back to 2%, Powell said. "But I have to say we're encouraged by the progress that we have made" on getting inflation back to the target, he said.
He added that this situation does not influence their decision to stop the balance sheet runoff, as both the reduction in the balance sheet and potential rate cuts can occur simultaneously, representing different forms of normalization.
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