- US Federal Reserve Chairman Jerome Powell confirmed the Fed's move towards lowering interest rates in the coming period, which is in line with market expectations over the past weeks, and with data issued on inflation and labor market figures.
- “The time has come to adjust policy,” Powell said during his speech at the Fed’s annual symposium in Jackson Hole, Wyoming, USA. “The direction is clear, and the timing and pace of rate cuts will depend on incoming data, evolving expectations, and the balance of risks,” according to CNBC.
- Powell noted that four and a half years after the onset of COVID-19, the worst economic distortions associated with the pandemic have begun to fade. Inflation has fallen sharply, the labor market is no longer overheated, conditions are less tight than they were before the pandemic, and supply constraints have normalized. The balance of risks to the economy has shifted.
- He pointed out that the Fed's goal was to restore price stability while maintaining a strong labor market and avoiding the sharp increases in unemployment that characterized previous episodes of deflation when inflation expectations were less stable, and while the mission is not yet complete, we have made a great deal of progress toward this outcome.
- “Today, I will begin by addressing the current economic situation and the path ahead for monetary policy, then move on to discussing economic events since the pandemic hit, exploring why inflation has risen to levels not seen in a generation, and why it has fallen so much while unemployment has remained low,” he added.
