Just in time to give Kamala Harris a boost.
Federal Reserve Chairman Jerome Powell on Friday said it is time for interest rate cuts since “inflation has declined significantly.”
“Inflation has declined significantly. The labor market is no longer overheated, and conditions are now less tight than those that prevailed before the pandemic,” Jerome Powell said at a press conference in Jackson Hole, Wyoming. “Supply constraints have normalized. And the balance of the risks to our two mandates has changed.”
WATCH:
“Inflation has declined significantly,” Fed Chair Powell says at Jackson Hole, later adding: “The time has come for policy to adjust. The direction of travel is clear.” pic.twitter.com/H6AdwPVr0O
— Yahoo Finance (@YahooFinance) August 23, 2024
Inflation has not declined. Americans are still struggling to buy groceries.
CNBC reported:
Federal Reserve Chair Jerome Powell laid the groundwork Friday for interest rate cuts ahead, though he declined to provide exact indications on timing or extent.
“The time has come for policy to adjust,” the central bank leader said in his much-awaited keynote address at the Fed’s annual retreat in Jackson Hole, Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
With markets awaiting direction on where monetary policy is headed, Powell focused as much on a look back at what caused the inflation that led to an aggressive series of 11 rate hikes from March 2022 through July 2023.
However, he did note the progress on inflation and said the Fed can now turn its focus equally to the other side of its dual mandate, namely to make sure the economy stays around full employment.
The fed increased rates 11 times for a total of 550 basis points between between March 2022 to July 2023 to hedge inflation but it didn’t work.
The higher interest rates are now posing a problem for the banking sector and the real estate market.
Silicon Valley Bank, Signature Bank and First Republic Bank collapsed in 2022 after depositors withdrew billions of dollars from the lending institutions.
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