Powell: Inflation Battle Not Over But Path to Stability Clear
Federal Reserve Chair Jerome Powell has indicated that inflation is not yet defeated, though he believes the U.S. is on course for stable prices and low unemployment. Speaking to Congress, Powell reiterated that interest rate cuts would only follow a stronger assurance of achieving the Fed's 2% inflation target.
Federal Reserve Chair Jerome Powell said on Wednesday he was not yet ready to declare inflation had been beaten, but felt the U.S. remained on a path back to stable prices and continued low unemployment. Powell emphasized that rate cuts would occur only when there's greater confidence inflation will return to the central bank's 2% target.
During a congressional hearing, Powell stated, 'I do have some confidence of that,' but added that he is 'not ready to say that yet.' He explained that recent data has edged the Fed closer to its goal, but more progress is required. He noted that the U.S. is heading toward a 'soft landing' where the inflation target is met without a significant increase in unemployment.
Powell highlighted that the Fed's preferred measure of inflation, the Personal Consumption Expenditures Price Index, was 2.6% as of May. He reiterated that rate cuts will follow once underlying momentum indicates the figure will fully return to 2%. Powell also defended the Fed's dual mandate and addressed questions on bank regulations and economic conditions.
(With inputs from agencies.)
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