“With inflation on a path towards target, the risks associated with employment take on a larger role going forward on the heels of the large negative...
Federal Reserve Chair Jerome Powell heads into the opening dinner at the Kansas City Fed ’s annual economic symposium in Jackson Hole - Federal Reserve Chair Jerome Powell said on Friday "the time has come" for the U.S. central bank to cut interest rates as rising risks to the job market left no room for further weakness and inflation was in reach of the Fed's 2% target, offering an explicit endorsement of an imminent policy easing.
“He wants to let the markets know that the Fed is not behind the curve. By being as clear about the likelihood of a rate cut in September, he's actually cutting rates a month early.” “We have now seen more evidence than ever that a soft landing has been achieved. Since the post-Covid uptick in inflation, consumer prices are now closer than they have ever been to the Fed's 2% target. While there has been a slowing of economic data, that's very different from a recession.”“He noted growing concern about the job market and that's really helping to ratify market expectations for multiple cuts through the autumn months.
“Powell is on the dovish side, saying there’s ample room to respond to any risk we may face. I think that’s the key.” “He's basically saying that the magnitude is going to be driven by the data, and as you look at what's likely in the jobs data and the CPI before the Fed meets, and the general tone, I don't see a strong sense of urgency or panic that a 50-basis point cut would seem to imply.
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