#PowellRemarks #PowellRemarks The President of the Federal Reserve of the United States, Jerome Powell, announced that "the time has come" to begin cuts in interest rates, marking a shift in monetary policy after more than two years of restrictive measures. This announcement was made during his speech at the Jackson Hole Economic Symposium in Wyoming on August 23, 2024.

Key points from Powell's speech

Inflation under control: Powell expressed greater confidence that inflation is on a sustainable trajectory toward the 2% target, after peaking at 9% during the pandemic.

Cooling labor market: Although the economy continues to grow, there is a slowdown in hiring and an increase in the unemployment rate, which stands at 4.3%.

Next steps: Although no exact date was specified, it is anticipated that the Federal Reserve could begin to lower rates at its September meeting, possibly by a quarter percentage point from the current level of 5.25%-5.50%.

Market reaction

Financial markets have reacted positively to the prospect of a more lenient monetary policy, although caution remains due to uncertainty about the pace and magnitude of the cuts.

This change in the Federal Reserve's stance seeks to balance the need to control inflation with the goal of maintaining a strong labor market, avoiding an economic recession.