Jerome Powell Says “Time Has Come” For Interest Rate Cuts

(AmericanProsperity.com) – Federal reserve Chair Jerome Powell stated that the central bank is going to be cutting interest rates soon.

Jerome spoke in Jackson Hole, Wyoming, saying “the time has come” for the Fed to adjust its interest rate policy. This announcement is much awaited after years of trying to fight high inflation with high interest rates.

Powell has said in previous meetings that they were waiting to ensure the inflation would begin moving down to their target of two percent before enacting interest rate cuts. According to Powell’s speech, it’s clear that they’ve met that goal.

“My confidence has grown that inflation is on a sustainable path down to two percent,” Powell said.

Recent economic changes have shifted the Fed’s focus to ensuring a healthy labor market instead of focusing on keeping inflation under control since the rate of unemployment had gone up to over four percent this year.

The labor market has begun to slow with the cooling inflation, and a recent jobs report showed some concerning numbers, leading to concerns that there would be a recession in the U.S.

“A cooldown in the labor market is unmistakable,” Powell said.

Market observers have said that there’s a potential of them cutting a regular quarter point or possibly taking a larger chunk with a half point reduction.

Seema Shah, Chief Global Strategist at Principal Asset Management, said, “Powell has rung the bell for the start of the cutting cycle. Make no mistake, if the labor market shows signs of further cooling, the Fed will cut with conviction.”