Powell US Inflation Shows Signs of Easing Federal Reserve Chair Jerome Powell indicated on Monday that recent data has bolstered the central bank’s confidence in inflation easing towards its two percent target, potentially paving the way for future interest rate cuts.
In an interview with David Rubenstein of the Economic Club of Washington DC, Powell highlighted that while the Fed has been focused on addressing inflationary pressures following the pandemic, it is now also monitoring progress towards maximum employment.
Powell emphasized that unexpected weakness in the labor market could prompt the Fed to adjust its policies accordingly.
The Federal Reserve aggressively raised the benchmark lending rate in 2022 to manage demand and curb inflation, maintaining rates at historically high levels despite persistent price increases. However, recent reports, including a decline in the consumer price index last week, suggest positive developments that could influence future rate decisions.
With unemployment rising to its highest level since 2021, Powell hinted at a potential earlier-than-expected reduction in rates to support economic stability.
“I have always believed there is a path to sustainably lowering inflation to our two percent target without significant labor market disruptions typical of tightening cycles,” Powell stated.
