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STORY: :: Powell says "the time has come" to cut interest rates

during his speech from Jackson Hole

:: Jerome Powell

Federal Reserve Chair

:: August 23, 2024

:: Jackson Hole, Wyoming

"Overall, the continued the economy continues to grow at a solid pace, but the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished and the downside risks to employment have increased, as we highlighted in our last FMC statement, we are attentive to the risks to both sides of our dual mandate. The time has come for policy to adjust 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."

Referencing the two goals that the Fed is tasked by Congress to achieve, Powell said his "confidence has grown that inflation is on a sustainable path back to 2%," after rising to about 7% during the COVID-19 pandemic, while unemployment is increasing.

While Powell said the jump of nearly a percentage point in the unemployment rate over the past year was due largely to rising labor supply and slowed hiring, not increased layoffs, he also was emphatic that the Fed wanted to prevent any further erosion - his prior talk of labor market "pain" as necessary to control inflation now a thing of the past.