Fed Opens Door to September Rate Cut if Inflation Stays Cool

Original Article:

Source: Link

Federal Reserve officials left interest rates unchanged at their July meeting, but the head of the central bank made it clear that recent progress in lowering inflation could enable policymakers to cut interest rates as soon as their next meeting in September. “If we do get the data that we that we hope, then a reduction in our a policy rate could be on the table at the September meeting,” Jerome H. Powell, the Fed chair, said during a news conference on Wednesday. Mr. Powell also suggested that the Fed could make a string of reductions before the end of the year, depending on inflation and job market data. “I can imagine a scenario in which there would be everywhere from zero cuts to several cuts, depending on the way the economy evolves,” Mr. Powell said. That remark was notable because it implied that three rate cuts were possible, which is in line with market expectations but more than the two the Fed had most recently forecast. Mr. Powell spoke shortly after the Fed announced that it would hold rates at 5.3 percent for now — a two-decade high, where they have remained for a year.