07/16/2024

Fed Chair: Latest Data 'Add Somewhat to Confidence' Inflation is Shrinking to 2 Percent

This suggests interest rate cuts may not be far off

Federal Reserve Chair Jerome Powell said on Monday the three U.S. inflation readings over the second quarter of this year "add somewhat to confidence" that the pace of price increases is returning to the Fed's target in a sustainable fashion, remarks that suggest a turn to interest rate cuts may not be far off.

"In the second quarter, actually, we did make some more progress" on taming inflation, Powell said at an event at the Economic Club of Washington. "We've had three better readings, and if you average them, that's a pretty good place."

Consumer prices in the second quarter rose at an annualized pace of 2.1 percent, excluding the volatile food and energy components, and that index tends to run higher than the Fed's preferred Personal Consumption Expenditures price index. PCE data for June will not be released until next week.

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