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- Jerome Powell stands by the Fed’s decision to cut interest rates by 50 basis points to keep inflation in check while maintaining a strong labor market.
- The U.S. economy is showing steady growth with GDP at 2.2%, and consumer spending remains solid despite a cooling labor market.
- Inflation has dropped to 2.2%, but the Fed’s target is still 2%, and core inflation is slightly higher at 2.7%.
Jerome Powell, the man in charge of the Federal Reserve, has addressed the public directly moments after his decision to slash interest rates by 50 basis points.
At the post-FOMC presser, Powell told us that he trust the decision he made, and that it wasn’t because the economy is doing worse than economists think.
He reiterated what he has been saying for months, which is that the policy committee will continue making its decisions meeting by meeting, and going data by data.
Powell added that his entire team supported the 50 bps cut. He also addressed the possibility of more cuts. According to him, most in the committee are also all for the idea of 2 or 3 more cuts before 2024 runs out.
He declined to give a specific timeline or even pace of the incoming cuts though.
“We remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people,” Powell stated.
Inflation has dropped from 7 percent at its peak to a more manageable 2.2 percent as of August. The Fed is now working to push inflation down even further, closer to its target of 2 percent.
Despite the cooling labor market, Powell assured that it’s not a major source of inflationary pressure. Wage growth has slowed, and the jobs-to-workers gap has narrowed.
According to the Summary of Economic Projections (SEP), the unemployment rate is expected to rise slightly to 4.4 percent by the end of the year.
This is a developing story
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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Jai Hamid
Jai Hamid has been covering crypto, stock markets, technology, the global economy, and the geopolitical events that affect markets for the past 6 years. She has worked with blockchain-focused publications including AMB Crypto, Coin Edition, and CryptoTale on market analyses, major companies, regulation, and macroeconomic trends. She has attended London School of Journalism and thrice shared crypto market insights on one of Africa’s top TV networks.
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