(Finance) – “The time has come for (monetary, ed.) policy to adapt. The direction of travel is clear and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” said the chairman of the Federal Reserve, Jerome Powellat the Jackson Hole symposium.
Powell said “increasingly convinced that inflation is on a sustainable path to return to 2 percent” and stressed that “the cooling of labor market conditions is unequivocal.”
“It seems unlikely that the labor market will be a source of high inflationary pressures any time soon,” he said during his speech in the Wyoming town. We neither seek nor welcome a further cooling of labor market conditions.“.
According to the Fed’s number one, “the economy continues to grow at a solid pace. But inflation and labor market data point to an evolving picture. Upside risks to inflation have diminished. And downside risks to employment have increased. As we noted in our last FOMC statement, we are alert to risks to both parts of our dual mandate.”
“We will do everything we can to support a strong labor market as we make further progress towards price stability,” he explained. “With an appropriate reduction in policy moderation, there are good reasons to think that the economy will return to 2 percent inflation while maintaining a strong labor market. The current level of our policy rate gives us ample room to respond to any risks we may face, including the risk of a further unwelcome weakening of labor market conditions.”