Powell says Federal Reserve is more confident inflation is slowing to its target

Chair Jerome Powell said the Federal Reserve is becoming more convinced that inflation is headed back to its 2% target and said the Fed would cut rates before the pace of price increases actually reached that point

Federal Reserve Powell (Copyright 2024 The Associated Press. All rights reserved.)

Chair Jerome Powell said Monday that the Federal Reserve is becoming more convinced that inflation is headed back to its 2% target and said the Fed would cut rates before the pace of price increases actually reached that point.

“We've had three better readings, and if you average them, that's a pretty good pace," Powell said of inflation in a question-and-answer question at the Economic Club of Washington. Those figures, he said, “do add to confidence” that inflation is slowing sustainably.

The Fed chair declined to provide any hints of when the first rate cut would occur. But most economists and investors expect the central bank to begin cutting its key rate in September, though a few now envision a rate cut as early as the Fed's next meeting later this month.

“Today," Powell said, “I'm not going to send any signals on any particular meeting.”