Federal Reserve Chairman: It’s time to lower interest rates

Key expressed US Federal Reserve Board Jerome Powell Today, Friday, there is clear support for Tayseer Monetary policysaying that he does not want the shortage in the labor market to continue, and he expressed his confidence in the entrance Inflation From reaching the central bank’s target of 2%.

“The upside risks associated with inflation have declined. The downside risks associated with employment have increased,” Powell said in a speech at the Federal Reserve’s annual economic conference in Jackson Hole, Wyoming.

He continued, “It’s time to change the policy. Interest rates on incoming data, changes in expectations, and balance of risks.”

Regarding the two objectives assigned to him Congress With their research, Powell said his “confidence has gone up.” Inflation It’s on a steady path back to 2%,” after rising to around 7% during the Corona pandemic, while increasing Unemployment rate.

It should be noted that the US Central Bank kept the interest rate in the range of 5.25% to 5.5% at its last meeting last June.

Powell’s statements at the Jackson Lake Resort came in front of a large number of central bank governors and economists (Reuters)

Powell said the increase in the unemployment rate of about one percentage point over the past year is largely due to an increase in the workforce and a slowdown in hiring, not due to more layoffs.

The unemployment rate is currently at 4.3%, about a level that Fed officials feel is consistent with long-term sustainable inflation.

“We neither want nor welcome further tightening of labor market conditions,” Powell said. prices With adequate easing of policy restrictions, there will be good reason to believe that the economy will… “Return to 2% inflation while maintaining a strong labor market.”

Today, Friday, traders continued to bet on reducing interest rates by a quarter of a percentage point at the meeting of the Federal Reserve on September 17 and 18, but after Powell’s statements, about one in three – trade betting on reducing inflation by half a percent. point.

“Although the work is not done yet, we have made significant progress” toward restoring price stability, Powell said.

The Federal Reserve says that price stability occurs when the inflation rate is 2% according to the US Personal Consumption Price Index, and the index registered an annual rate of 2.5%.

Powell’s statements at Jackson Lake Resort in Grand Teton National Park in the state of Wyoming came in front of a large number of central bank governors and economists.

This gathering has become a global platform for officials to articulate their views on monetary policy and the economy.