Fed Chair Powell Signals Imminent Rate Cuts Amid Easing Inflation

Federal Reserve Chair Jerome Powell suggested an imminent easing of policy in his speech at the Kansas City Fed's annual economic conference. He indicated that the risks to inflation have lessened, and the unemployment rate has increased. Powell emphasized the Fed's confidence in reaching the 2% inflation target while supporting a robust labor market.

Federal Reserve Chair Jerome Powell on Friday provided a clear endorsement of an imminent policy easing, emphasizing that further cooling in the job market would be unwelcome. He expressed confidence that inflation was nearing the U.S. central bank's 2% target.

In his anticipated speech at the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming, Powell noted that the upside risks to inflation have diminished, while the downside risks to employment have increased. He asserted that the time for policy adjustment has come and that the pace of rate cuts will depend on incoming data and evolving outlook.

Powell's comments, made at the Jackson Lake Lodge in Wyoming's Grand Teton National Park, have largely solidified the Fed's shift to a new chapter in monetary policy, with rate cuts expected to start next month. While he did not delve into specifics, Powell's remarks highlighted the progress made toward restoring price stability and maintaining a strong labor market.

(With inputs from agencies.)