Messages from Fed Chairman Powell

Fed Chair Jerome Powell stated that the latest economic data show that inflation is continuing to trend downward, but that they need more confidence before cutting interest rates. Fed Chair Jerome Powell spoke at the European Central Bank’s forum held in Portugal. Powell stated that since the US economy and labor market are strong, there is room to take the right steps without rushing. Stating that they have made significant progress in reducing inflation to target, Powell said, “The latest data show that we are on a disinflation path. However, we need more confidence that inflation is moving towards our 2 percent target.” Fed Chair Powell did not give any clues about the timing of the first interest rate cut at the forum he attended with ECB President Christine Lagarde and Brazilian Central Bank President Roberto Campos Neto. The Fed kept the policy rate between 5.25 and 5.50 percent at the last meeting. Officials state that more confidence is needed that inflation is falling sustainably.