Fed’s favored inflation gauge shows cooling price pressures
The ongoing decline in inflation makes it even more likely that the Federal Reserve will cut its key benchmark rate further in the coming months.
The ongoing decline in inflation makes it even more likely that the Federal Reserve will cut its key benchmark rate further in the coming months.
The rate cut, the Fed’s first in more than four years, reflects its new focus on bolstering the job market, which has shown clear signs of slowing.
At issue is how fast the Fed wants to lower interest rates to a point where they’re no longer acting as a brake on the economy—nor as an accelerant. Where that so-called “neutral” level falls isn’t clear.
Collectively, Friday’s figures depict a job market slowing under the pressure of high interest rates but still growing.
Federal Reserve Chair Jerome Powell emphasized that inflation, after the worst price spike in four decades inflicted pain on millions of households, appears largely under control.
Further guidance on the Fed’s next steps is expected when Chair Jerome Powell gives a highly anticipated speech Friday morning at the annual symposium of central bankers in Jackson Hole, Wyoming.
Federal Reserve Chair Jerome Powell said Wednesday that the upcoming elections would have no influence on the Fed’s decisions.
In his remarks Monday, Federal Reserve Chair Jerome Powell stressed that the Fed did not need to wait until inflation actually reached 2% to cut borrowing costs.
Optimism is rising among economists, investors and Federal Reserve officials that U.S. inflation is nearly under control, with the latest report on consumer prices expected to show another month of mild increases.
The Federal Reserve has made “considerable progress” toward its goal of defeating the worst inflation spike in four decades, Chair Jerome Powell said in his testimony to the Senate Banking Committee.
After some persistently high inflation reports at the start of 2024, Powell said, the data for April and May “do suggest we are getting back on a disinflationary path.”
The policymakers’ forecast for one rate cut was down from a previous forecast of three, likely because inflation, despite having cooled in the past two months, remains persistently elevated.
Hopes for interest rate cuts this year by the Federal Reserve are steadily fading, with a stream of recent remarks by Fed officials underscoring their intention to keep borrowing costs high as long as needed to curb persistently elevated inflation.
The Federal Reserve’s more cautious outlook stems from three months of data that pointed to chronic inflation pressures and robust consumer spending.
Since the start of the year, Federal Reserve Chair Jerome Powell and his colleagues had said they were looking for more assurance that inflation was ticking steadily down. Instead, they’ve gotten the opposite.
Federal Reserve Chair Jerome Powell said the economy’s strength means the Fed isn’t under pressure to cut rates and can wait to see how the inflation numbers come in.
A key question for Federal Reserve Chair Jerome Powell and the 18 other officials on the Fed’s interest-rate-setting committee is how—or whether—recent inflation figures have altered their timetable for cutting rates.
In his remarks to Congress on Wednesday, Federal Reserve Chair Jerome Powell offered no hints on the potential timing of rate cuts.
In minutes from the Jan. 30-31 meeting released Wednesday, most Fed officials said they were worried about moving too fast to cut their benchmark interest rate before it was clear that inflation was sustainably returning to their 2% target.
Federal Reserve Chair Jerome Powell said in an interview broadcast Sunday night that the Federal Reserve remains on track to cut interest rates three times this year.