US Federal Reserve Chairman Jerome Powell expects future monetary policy to move towards a more ‘neutral stance’.
While speaking at an economic event in Nashville earlier this week, Powell said the economy looks “strong overall.”
He noted that there are roughly equal levels of risk associated with the Fed’s goals of reducing inflation and keeping the labor market strong.
“Our decision to cut our policy rate by 50 basis points reflects our growing confidence that, with an appropriate recalibration of our policy stance, labor market strength can be maintained in a context of moderate economic growth and inflation sustainably falling to 2 percent. .
If the economy develops broadly as expected, policy will move towards a more neutral stance in the future. But we are not following any particular course. The risks are two-sided and we will continue to make our decisions meeting by meeting. As we consider additional policy adjustments, we will carefully assess the incoming data, the evolving outlook and the balance of risks. Overall, the economy is in solid shape; we plan to use our tools to keep it there.
Last month, the Fed cut interest rates for the first time since March 2020. US inflation was 2.5% in August.
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