Fed Chair Jerome Powell today's remarks were roughly in line with the June 12 FOMC meeting
Powell was speaking at the European Central Bank Forum on Central Banking in Sintra, Portugal.
Federal Reserve Chairman Jerome Powell delivered some monetary policy remarks during the European Central Bank Forum on Central Banking in Sintra, Portugal on Tuesday, July 2.
In general, he emphasized that the latest economic data suggests that getting inflation back to the 2% target has seen some progress but the Fed would like to see more evidence to proceed with the rate cuts as the labor market and US economy are strong in his view. Notably, he also said that the US central bank does not foresee 2% inflation to hit this year or next year.
At this point, it is worth bringing out comments from another official last week. San Francisco Fed President Mary Daly emphasized that the labor market is nearing an inflection point and if it slows further we could see a higher unemployment.
Interestingly, the Chairman also said again that the US budget deficit is very large and unsustainable.
In general, Jerome Powell welcomes the recent progress on inflation but needs more confidence to start cutting rates. This is nothing new from his previous speech during the press conference after the Fed’s latest interest rate decision meeting on June 12.
For the full recap of the Fed’s June interest rate decision click on the link below.
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