Federal Reserve official announcements and meeting minutes

Powell Signals September Fed Rate Cuts, Likely Quarter-Percentage Point Reduction

Aug 26, 2024, 06:01 PM

Federal Reserve Chair Jerome Powell announced at the Jackson Hole Economic Symposium that the time has come for the central bank to begin cutting interest rates, signaling a shift in monetary policy. Powell's remarks have sparked discussions among bond traders regarding the size and pace of the upcoming rate cuts, with many anticipating a reduction as early as September. This decision comes amid signs of easing inflation and a less tight labor market, indicating a potential turning point in the Federal Reserve's battle against inflation. Powell's comments have led to a positive response in financial markets, with equities and bonds expected to stabilize. San Francisco Fed President Mary Daly also indicated support for rate cuts, suggesting a likely quarter-percentage point reduction next month. The anticipated policy shift aims to address concerns over accelerating unemployment and economic growth, while maintaining a balanced labor market. Interest rates are currently at a two-decade high.