Federal Reserve Chairman Jerome Powell has given his clearest signal that central bank is ready to cut interest rates in September.
In a speech delivered today at an economic symposium sponsored by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, Powell observed that “the economy continues to grow at a solid pace,” adding that “the upside risks to inflation have diminished and the downside risks to employment have increased.” In this environment, Powell stated, the Fed was able to consider a change in rate policy away from its current 23-year high of 5.25% to 5.5%.
“The time has come for policy to adjust,” he said. “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.”
The Fed next votes on its rate policy in mid-September, six weeks before the presidential election. The central bank’s role in the economy has become a political issue during the campaign, with former President Donald Trump warning that a rate cut ahead of the election could be seen as a political bias to assist the Democratic incumbent – initially President Joe Biden, now Vice President Kamala Harris.
Powell acknowledged that the Fed has been and will continue to be open to criticism.
“As we begin this process later this year, we will be open to criticism and new ideas, while preserving the strengths of our framework,” he said. “The limits of our knowledge – so clearly evident during the pandemic – demand humility and a questioning spirit focused on learning lessons from the past and applying them flexibly to our current challenges.”
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Powell, for that matter, any mouth piece for the Fed is full of BS. They can do whatever they want whenever they want! They ramped up the rates, print money like there’s no tomorrow & will do whatever benefits them, not the useless eaters aka the people.
Exactly Jay!!!
We never should have had the historical low rates as long as we did!
Coincidence?? I don’t think so. Jay has it right
The Fed should give the revised jobs number that was more than 800,000 off from earlier reporting, time to digest into the fall season and forego the September bias toward easing.Plenty of runway ahead to move down including two times .50% if catch up is needed to accomplish the same 100 bps result they are talking.
The games the fed plays during an election year! Why wait till closer to the election? They serve their own agenda not the people’s best interests.. do away with the central banking/fed period!
Let’s go back to the past when local banks loaned money and the once upon a time there was an honor system…
With Gesara/nesara, the mortgage brokers will soon be out of business. Fed is all but done for….PTL
Just in time for politics. Just in time to continue to keep these ridiculously overpriced houses. Let the overboard pricing never end.