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Federal Reserve Chair Jerome Powell delivered a key speech today, emphasizing the overall strength of the U.S. economy, while the Fed took action to cut interest rates by 50 basis points to a range of 4.75% to 5%. This rate cut reflects the Fed’s growing confidence in balancing inflation control with a strong labor market.
Key points from Powell’s speech included:
- “Economy is strong overall”: Powell noted that the U.S. economy continues to show resilience and stability.
- “Growing confidence”: The Fed now has increased confidence in its ability to maintain a healthy labor market and control inflation simultaneously.
- “Indicators suggest labor market is now less tight than just before the pandemic”: Powell pointed out that the labor market, while still robust, is cooling from the overheated state seen in the years leading up to the pandemic.
These remarks came as the Federal Reserve made the significant decision to lower interest rates, signaling optimism about future economic conditions while ensuring inflation remains under control. Powell’s speech reinforced the Fed’s commitment to a stable and prosperous economic environment.