"It's time to adjust policy," CNBC quoted Powell as saying, adding: "The direction is clear; the timing and pace of interest rate cuts will depend on the data, the economic outlook, and the balance of risks."
The inflation rate in the US is expected to gradually reach 2%.
From March 2022 to July 2023, to combat rising inflation, the Fed conducted a series of 11 sharp interest rate hikes. However, Powell stated that progress had been made in controlling inflation and the Fed could now shift its focus to another aspect of its dual mandate: ensuring economic growth and creating more jobs. The announcement of interest rate cuts comes as inflation is gradually returning to the Fed's 2% target. Currently, the inflation rate is around 2.5%, significantly lower than the 3.2% of a year ago and far below the peak of over 7% in June 2022.
Inflation is cooling in the US, paving the way for the Fed to lower interest rates.
Immediately after the Fed chairman's speech, the US stock market rose, while Treasury yields fell sharply. Investors are anticipating that the Fed will cut the benchmark interest rate by at least 0.25 percentage points in September.
Source: https://thanhnien.vn/fed-sap-giam-lai-suat-co-ban-185240825181837875.htm
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