Good news from the US. Federal Reserve Chairman Says ‘The Time Has Come’ To Cut Interest Rates

Federal Reserve Chairman Jerome Powell said that “the time has come” for the central bank of the United States of America (US) to cut the benchmark interest rate. The decision could come in a context where risks to the labor market have multiplied and inflation is approaching the target of 2%.

“Risks to inflation have decreased and risks to unemployment have increased,” Powell said in his much-anticipated speech at the Federal Reserve’s annual meeting in Jackson Hole, Wyoming.

“It is time for a change in monetary policy. The direction we will go is clear, and the timing and pace of interest rate cuts will depend on the data to come,” he said, according to Reuters.

Financial analysts expected the Federal Reserve to cut interest rates at its September 17-18 policy meeting, a view that was reinforced after a report from the central bank’s July meeting showed that a “majority” of – policy making to agree that policy discounting would begin next. month.

The US unemployment rate is currently at 4.3%, a rate consistent with long-term stable inflation in the view of Fed officials.

“We are not trying to achieve another cooling of the labor market situation. We will do all we can to support a strong labor market while making further progress on price stability. With an appropriate lifting of restrictions, there is reason to believe that the economy will return to 2% inflation while maintaining a strong labor market,” said the head of the Fed.

The official’s statements removed any doubt that the US Federal Reserve is opening a new chapter in its monetary policy, and the indication is that, at its next meeting, the Fed’s Monetary Policy Committee (FOMC) will reduce the rate flat benchmark.

At the last monetary policy meeting, Fed officials unanimously decided to keep the interest rate at a range between 5.25% and 5.50%, as the highest level in the last 22 years.

According to data from the US Bureau of Statistics, the inflation rate was 2.9% in July, below the expectations of economists, the first drop below 3% in two years, from the peak of that period of 9.1%.