Jerome Powell: The U.S. Economy Is Strong—Interest Rate Cuts Depend on Coming Months
Waleed Farouk
Following the latest Federal Reserve policy meeting, Federal Reserve Chair Jerome Powell affirmed that the U.S. economy remains robust and resilient, with inflation moving closer to the central bank's target and the labor market continuing to show historically low unemployment rates.
In his post-meeting remarks, Powell announced that the Fed had decided to keep interest rates unchanged, describing the current stance as appropriate for the present and foreseeable economic conditions. However, he noted that a rate cut remains on the table and may or may not occur in the near future, depending entirely on how economic data evolves in the coming months.
On the issue of inflation, Powell acknowledged that inflation expectations have risen recently, but remain within a controllable range. Inflation is projected to stabilize at 3% in 2024, with a gradual decline to 2.4% by 2026. He welcomed the recent progress in inflation readings, emphasizing that the long-term inflation trajectory remains aligned with the Fed's goals.
Regarding the labor market, Powell described conditions as balanced, despite a slight slowdown in hiring, which he said is not yet a cause for concern. Job creation remains healthy, and unemployment is expected to hold steady at 4.5% this year and next.
Turning to broader economic expectations, Powell forecast that the U.S. economy will grow by 1.4% in 2024 and 1.6% in 2025. He warned, however, that trade tensions and tariffs are contributing to an atmosphere of uncertainty, which could gradually affect pricing and business activity. 'The best support we can offer the housing sector,' he added, 'is to achieve price stability.'
In closing, Powell stressed that the months ahead will be critical in determining the Fed's next steps, asserting that the central bank will not rush into premature decisions, but will continue to rely fully on actual economic data and global developments. He made clear that all committee members are committed to acting based on data, not political pressure or speculative expectations. 'At present, the Fed is in a very good position,' he concluded, 'and we will act as future developments require.'
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