In his speech to the US central bank’s annual economic conference in Jackson Hole, Wyoming, Jay Powell did not indicate the timing or potential magnitude of rate reductions.
The Fed’s rate-setting committee will convene again in mid-September, and financial markets and economists generally anticipate a quarter-point drop in the benchmark rate—the first since the cycle of rate hikes started in 2022.
Mr. Powell stated that the moment has arrived for policy to change.
The path of travel is obvious, and the rate cuts’ timing and speed will depend on incoming data, the changing prognosis.
once the COVID pandemic, economies started to slowly recover, thus the seeds of price rise were sown. However, once Russia invaded Ukraine, the pace of price growth significantly increased, pushing inflation to a 40-year high.
Unexpectedly, central banks have been reluctant to intervene in order to prevent so-called secondary effects, such as prices rising as a result of significant wage rises. This has made inflation in Western nations more difficult to control.
