Powell “If inflation slows, interest rate cuts can be advanced”

Powell Fed Chairman Who First Mentioned Possibility Of Rate Cut (Source: FT)

Jerome Powell, Chairman Of The U.S. Federal Reserve (Fed), Showed A Flexible Attitude Toward Rate Policy. On The 24th (Local Time), Chairman Powell Stated, “If Inflationary Pressures Ease Faster Than Expected Or The Labor Market Noticeably Slows, The Timing Of Rate Cuts Could Be Advanced.”

This Statement Is Interpreted As Indicating That The Fed Is Gradually Considering Flexibility In Its Existing Tightening Stance. Until Now, The Fed Has Maintained Its Position Of Keeping A High Rate Policy Until The Inflation Rate Converges To The Target Level. However, As Signs Of Slowing Consumer Inflation In The U.S. Have Recently Emerged, Expectations For The Possibility Of Rate Cuts Are Reviving.

The Market Expects The Fed To Provide Additional Signals At The July Federal Open Market Committee (FOMC) Meeting. Especially If Inflation And Employment Indicators Weaken More Than Initially Expected, Discussion Of Rate Cuts Could Accelerate Further, According To The Dominant View.

Although Chairman Powell Did Not Mention A Specific Time In This Statement, The Market Sees September Or November As A Likely Pivot Point For Rates.