Federal Reserve Chair Jerome Powell believes the “time has come” for the US to begin lowering interest rates. He also expressed his “growing confidence” that the fight against inflation is well underway.
In an unusually candid statement regarding the likely course of monetary policy, he declared during his keynote address at the Jackson Hole Economic Symposium in the western US state of Wyoming, “The time has come for policy to adjust.”
The timing and speed of rate reductions will depend on incoming data, the changing outlook, and the balance of risks, he continued, but the direction of travel is obvious. Following Powell’s comments, US stocks increased, with all three major Wall Street indices rising significantly at around 10 a.m. local time .
The world’s largest economy is experiencing a cooling of demand ahead of the presidential elections in November, where inflation and the cost of living will play a major role. The Fed’s benchmark lending rate is currently at a 23-year high of between 5.25 and 5.50 percent.
Powell stated that the Fed’s restrictive monetary policy had been implemented to “help restore balance between aggregate supply and demand, easing inflationary pressures and ensuring that inflation expectations remained well anchored. ”
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