- Powell: My confidence has grown that inflation is on the path to 2%
- Powell: We don't seek or welcome further labor market cooling
- Powell: "The time has come for policy to adjust"
- "The timing and pace of rate cuts will depend on incoming data," says Powell
Federal Reserve Chair Jerome Powell delivered a pivotal speech on Friday at the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming, laying the foundations for interest rate cuts.
Powell stated in his highly anticipated keynote address that "the time has come for policy to adjust." He outlined that the "direction of travel is clear" regarding future adjustments but noted that the "timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."
Powell expressed growing confidence that "inflation is on a sustainable path back to 2 percent," while also addressing the labor market conditions and inflationary pressures. He assured listeners that the Fed will support a strong labor market while making progress toward price stability.
Market participants are eagerly awaiting Powell's speech at the Jackson Hole symposium as it is expected to provide insights into the Federal Reserve's future monetary policy direction amidst ongoing economic uncertainties. With expectations of a rate cut at the next meeting in September, Powell's remarks will likely influence the market's perception of future monetary policy and the economy.
Analysts at Barclays believe that "Fed speak at Jackson Hole will be key to fine-tune policy expectations," while Goldman Sachs expects Powell to highlight data dependency and a cautious approach to rate cuts in his speech and subsequent interviews.
In conclusion, Powell's speech signals potential rate cuts in the near future, aiming to support economic stability and growth. Investors and market participants should closely monitor upcoming developments to align their investment strategies accordingly.