Federal Reserve Officials Signal Openness to Rate Cuts Amid Shifting Economic Landscape
✨ Boston Fed President Susan Collins stated on Wednesday that she anticipates the Federal Reserve will begin cutting interest rates later this year.
In a statement issued by the bank, Collins noted:
> “While I continue to expect a gradual return to a more normalized monetary policy later this year, that outlook remains highly data-dependent. My expectations could shift considerably based on unfolding events and the economic effects of evolving government policies.”
✨ Federal Reserve Chair Jerome Powell, in testimony before Congress, reaffirmed that the U.S. economy is not currently in a recession.
He emphasized that the latest economic indicators do not suggest a major slowdown or contraction, but reiterated that the Fed remains vigilant in monitoring the situation.
> “The United States is not in a recession,” Powell stated. “Current data reflects ongoing activity without a significant decline, but we are watching closely.”
✨ Powell also addressed the inflation outlook, suggesting that if inflation comes in lower than anticipated in the months ahead, it would likely justify the start of rate cuts.
> “If we begin to see inflation consistently falling below our forecasts, it would be appropriate to begin easing rates earlier,” he said.
✨ Additionally, Powell highlighted labor market conditions as a key factor.
> “A clear weakening in employment data would also support the case for an earlier reduction in interest rates,” he added.
✨ On the inflation front, Powell warned that new tariff policies could contribute to upward pressure.
> “Our projections show that recent import tariffs could lead to a rise in inflation,” he noted.
