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.
For nearly a year, cooling inflation has provided gradual relief to America’s consumers, who were stung by the price surges that erupted three years ago, particularly for food, gas, rent and other necessities.
Friday’s report from the Labor Department showed that employers added 35% fewer jobs than forecasters had expected and the unemployment rate hit its highest level since October 2021.
Federal Reserve Chair Jerome Powell said Wednesday that the upcoming elections would have no influence on the Fed’s decisions.
Despite the likely uptick, the U.S. economy, the world’s largest, has clearly cooled in the face of the highest borrowing rates in decades.
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.
The June figures will qualify as another installment of the more good inflation data the central bank has been seeking. Should inflation remain low through the summer, most economists expect the Fed to begin cutting its benchmark rate in September.
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.
Federal Reserve officials, who will end their latest policy meeting later Wednesday, are scrutinizing each month’s inflation data to assess their progress in their fight against rising prices.
Chair Jerome Powell is likely to underscore at a news conference Wednesday that the policymakers will need to see several more months of low inflation readings before they would consider reducing their key rate.
Friday’s report also showed that income growth slowed and spending cooled sharply in April, a trend that could help moderate economic growth and inflation in the coming months.
The latest snapshot comes as the Federal Reserve is grappling with inflation data that continues to surprise them.
The Federal Reserve’s more cautious outlook stems from three months of data that pointed to chronic inflation pressures and robust consumer spending.
A measure of inflation closely tracked by the Federal Reserve remained uncomfortably high in March, likely reinforcing the Fed’s reluctance to cut interest rates anytime soon.
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.
The March figures, the third straight month of inflation readings well above the Fed’s 2% target, provide concerning evidence that inflation is stuck at an elevated level after having steadily dropped in the second half of 2023.
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.
The financial markets cheered the message Wednesday from Jerome Powell and the Federal Reserve, with traders sending the Dow Jones industrial average surging 1%, to another all-time high.
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.
