Federal Reserve chairman points to possible rate cuts despite robust financial data
(MENAFN) In a speech delivered at Stanford University, Federal Reserve Chairman Jerome Powell hinted at the likelihood of a cut in the benchmark interest rate later in the year, despite recent reports portraying a robust US Economy and an increase in inflation during January and February. Powell emphasized that while the latest data indicated strength in growth and a labor market in the process of rebalancing, inflation was gradually approaching the Fed's 2 percent target, albeit through a complex trajectory.
Powell clarified that most Fed officials foresee the necessity of initiating reductions in the key interest rate at some juncture within the current year. Notably, he underscored the Fed's commitment to economic stability and reiterated that their decisions regarding interest rates would remain independent of political considerations, specifically dismissing any notion of influence from the upcoming presidential election.
The Federal Reserve faces pivotal meetings scheduled during the peak of the presidential campaign in July and September, where decisions on interest rates will be deliberated. Despite a notable decline in inflation from its peak levels, it remains above the Federal Reserve's target of 2 percent. The persistent elevation of average prices, surpassing pre-pandemic levels, has stirred concerns among many Americans and could potentially pose a challenge to President Joe Biden's bid for re-election.
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