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US Fed chair signals upcoming interest rate cut, saying 'time has come' for adjustment in monetary policy

Jerome Powell says his confidence has grown that inflation will drop to 2%, with Federal Open Market Committee not seeking further cooling in labor market

US Fed chair signals upcoming interest rate cut, saying 'time has come' for adjustment in monetary policy
2024-08-23 17:20:24

ISTANBUL 

In much-anticipated remarks, US Federal Reserve Chair Jerome Powell on Friday signaled a coming interest rate cut, saying the "time has come" for an adjustment in monetary policy.

"The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks," he told the annual Jackson Hole symposium in the US state of Wyoming.

"We will do everything we can to support a strong labor market as we make further progress toward price stability," he said. "With an appropriate dialing back of policy restraint, there is good reason to think that the economy will get back to 2 percent inflation while maintaining a strong labor market."

Powell said his confidence has grown that inflation is on a sustainable path back to 2%, adding that the Federal Open Market Committee (FOMC) does not seek or welcome further cooling in labor market conditions.

"Overall, the economy continues to grow at a solid pace. But the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished. And the downside risks to employment have increased," he explained.