The President of the Federal Reserve System of North America (Fed) said on Friday that “the time has come” to adjust monetary policy, indicating that he will cut interest rates in September.
“We recognize the risks of our dual mandate,” Jerome Powell assured in his opening remarks at the annual Jackson Hole symposium, adding that “the time has come for political [monetária] regulate.”
Despite this sign that the time is approaching for interest rate cuts, which markets expect at the September meeting, the Fed president notes that “the timing and pace of rate cuts will depend on the data received, the development of the outlook, and the balance of risks.”
Jerome Powell said “the task is not accomplished, but progress has been made” toward reducing inflation.
The Fed president stresses that inflation is “much closer” to the 2% target, signaling that he has more confidence that inflation is “on a sustainable path.”
On employment, Jerome Powell suggests that “the labor market has cooled and the unemployment rate has begun to rise to 4.3%, still low by historical standards but nearly a percentage point above the 2023 level.”
The current level of interest rates “provides ample room to respond to any risks we may face, including the risk of additional unwelcome deterioration in labor market conditions,” the official said.
Unlike the European Central Bank (ECB), the US Federal Reserve has not yet proposed cutting interest rates since the start of its rate-hike cycle to combat high inflation.
The Fed’s next meeting is September 17-18.
Author: Lusa
Source: CM Jornal
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