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Fed's Powell: Further Rate Cuts Appropriate if Inflation Slows
Summary: According to sources, Fed Chair Powell reiterated on Wednesday that she expects the Fed may cut short-term interest rates later this year if economic data align with her expectations of slowing inflation and a stable job market. Powell stated in a speech prepared for the Philadelphia Chamber of Commerce event, 'My baseline outlook is quite ...
According to sources, Fed Chair Powell reiterated on Wednesday that she expects the Fed may cut short-term interest rates later this year if economic data align with her expectations of slowing inflation and a stable job market. Powell stated in a speech prepared for the Philadelphia Chamber of Commerce event, 'My baseline outlook is quite benign,' anticipating inflation to fall to around 2% by year-end, with the job market stabilizing and economic growth remaining around 2%. She noted, 'If all of this comes to pass, then some modest adjustments to the federal funds rate later this year may be appropriate.' Regarding the job market, Powell emphasized once again, 'The labor market is clearly slowing, but not collapsing.' She believes risks are rising, which was also one of the key reasons she supported the 75 basis point rate cut by the FOMC last year.
