08.23.24

US Federal Reserve Chief: ‘The Time Has Come’ to Soon Begin Reducing Interest Rates

by: Christopher Rugaber

The Federal Reserve is prepared to start cutting its key interest rate from its current 23-year high, Chair Jerome Powell announced Friday. While Powell stopped short of giving a clear hint at just how large that move might be, he forcefully underscored that the central bank stands prepared to adjust policy to protect the job market from weakening further and to keep the economy on a path for a soft landing. “The time has come for policy to adjust,” Mr. Powell said during the Kansas City Fed’s annual conference at Jackson Hole in Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.” Powell’s speech was his firmest declaration yet that the Fed is turning a corner in its fight against inflation. After more than a year of holding interest rates at 5.3%, the highest level in more than two decades, officials finally have enough confidence to change their stance by cutting rates at their Sept. 17-18 meeting. Powell did not provide a clear outline for the path ahead, but by focusing on risks to the labor market, he did clearly hint that central bankers are willing to cut interest rates quickly rather than gradually if the job market appears to be at risk.

Read the full article on Associated Press