With inflation nearly defeated and the job market cooling, the Federal Reserve is prepared to start cutting its key interest rate from its current 23-year high.
Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve , Wednesday, July 31, 2024, in Washington. cooling, the Federal Reserve is prepared to start cutting its key interest rate from its current 23-year high, Chair Jerome Powell said Friday.
His reference to multiple rate cuts was the only hint that a series of reductions is likely, as economists have forecast. Powell emphasized that inflation, after the worst price spike in four decades inflicted pain on millions of households, appears largely under control:fell to 2.5% last month, far below its peak of 7.1% two years ago and only slightly above the central bank's 2% target level.
By cutting rates, he said, "there is good reason to think that the economy will get back to 2% inflation while maintaining a strong labor market."
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