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Fed’s Powell Signals an Upcoming Rate Cut in Jackson Hole Remarks
Jerome H. Powell indicated the Federal Reserve will begin to cut interest rates in September, but stopped short of stating how large that move might be.
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The time has come for policy to adjust. 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. We will do everything we can to support a strong labor market as we make further progress toward price stability. Today, the labor market has cooled considerably from its formerly overheated state. The unemployment rate began to rise over a year ago and is now at 4.3 percent — still low by historical standards, but almost a full percentage point above its level in early 2023. The upside risks to inflation have diminished. And the downside risks to employment have increased. After a pause earlier this year, progress toward our 2 percent objective has resumed. My confidence has grown that inflation is on a sustainable path back to 2 percent. So let me wrap up by emphasizing that the pandemic economy has proved to be unlike any other and that there remains much to be learned from this extraordinary period.
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