- U.S. Federal Reserve Chairman Jerome Powell said second-quarter economic data gave policymakers greater confidence that inflation is moving toward the central bank's 2% target, potentially paving the way for a near-term interest rate cut.
- Powell, during an interview with David Rubenstein at the Economic Club of the United States, yesterday evening, considered that the recent economic data adds to confidence in the path of inflation, explaining, “The latest inflation readings are in a very good place.”
- “We didn’t gain any additional confidence in the first quarter, but the three readings in the second quarter, including the one from last week, add somewhat to the confidence,” Powell added.
- While the U.S. economy is adding jobs at a solid pace amid low unemployment rates, the labor market has shown signs of slowing. The unemployment rate has been gradually rising in recent months and is now at its highest level since 2021.
- According to Powell, the “hard landing” scenario is not the most likely scenario now, noting that there does not appear to be a recession in the labor market.
- He said there was concern “over time” about the level of the U.S. deficit, but made clear that it was not the Fed’s job to advise Congress on the matter.
- The Federal Open Market Committee meets on July 30-31, a meeting in which the Fed is expected to keep interest rates unchanged.
- Traders are betting on at least two U.S. interest rate cuts before the end of 2024, starting in September, according to Bloomberg.
