However, he refrained from offering specific details regarding the timing and magnitude of these adjustments.
According to CNBC, Powell, during his much-anticipated keynote speech at the Federal Reserve's annual retreat in Jackson Hole, Wyoming, stated, "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."
The Federal Reserve Chair's remarks come at a time when markets are eagerly awaiting guidance on the future course of monetary policy. Powell's speech offered a retrospective analysis of the factors that led to inflation, which subsequently necessitated a series of 13 rate hikes from March 2022 through July 2023.
WATCH: BIDEN LEAVING OFFICE IN DISGRACE AS HE PARDON'S HUNTER
However, Powell acknowledged the progress made in curbing inflation, asserting that the Federal Reserve can now shift its attention to the other aspect of its dual mandate - ensuring the economy remains close to full employment. "Inflation has declined significantly. The labor market is no longer overheated, and conditions are now less tight than those that prevailed before the pandemic," Powell said. "Supply constraints have normalized. And the balance of the risks to our two mandates has changed."
COINCIDENCE OR VERY TELLING? SALES OF THESE HAVE SOARED THIS YEAR!
August 24, 2024
Powell pledged to do everything within his power to ensure the labor market remains robust and progress on inflation continues. His speech was well-received by the markets, with stocks gaining and Treasury yields falling sharply.
TEACHERS UNION BOSS SHOCKS WITH BOMBSHELL ADMISSION ON MSNBC—AND UNION LEADERS LEFT SPEECHLESS!"
The inflation rate has been gradually returning to the Federal Reserve's 2% target, though it has not yet reached that mark. The most recent measure of inflation preferred by the Federal Reserve showed the rate at 2.5%, down from 3.2% a year ago and significantly lower than its peak of over 7% in June 2022.
IS ZELENSKY HIDING A DARK SECRET? PUTIN ALLY DROPS BOMBSHELL ALLEGATIONS
Concurrently, the unemployment rate has been steadily rising, currently standing at 4.3%. This figure would typically signal a potential recession. However, Powell attributed this increase to more individuals entering the workforce and a slower pace of hiring, rather than a rise in layoffs or a general deterioration in the labor market.
JOE BIDEN PARDONED HUNTER... BUT DID HE JUST OPEN PANDORA’S BOX FOR CONGRESS?
"Our objective has been to restore price stability while maintaining a strong labor market, avoiding the sharp increases in unemployment that characterized earlier disinflationary episodes when inflation expectations were less well anchored," he said. "While the task is not complete, we have made a good deal of progress toward that outcome."
TRUMP TRANSITION: WHEN YOU LOSE ALL TRUST IN THE FBI, THIS HAPPENS...
Market analysts anticipate that the Federal Reserve will begin cutting rates in September, although Powell did not confirm this in his speech. Minutes from the July open market committee meeting, released Wednesday, noted that a "vast majority" of officials believe a September cut will be appropriate so long as there are no data surprises.
WHO IS KASH PATEL AND WHY DID TRUMP PICK HIM TO LEAD THE FBI?
Powell also took time to evaluate the causes of the inflation surge, which reached its highest level in over 40 years, as well as the Federal Reserve's policy response and why price pressures have eased without a recession.
When inflation began to rise in early 2021, Powell and his colleagues, along with many Wall Street economists, dismissed it as "transitory" and attributed it to Covid-related factors that would eventually subside.
STRANGER THINGS: ELON MUSK GETS BUY-IN FROM VERY UNLIKELY ALLY!
"The good ship Transitory was a crowded one," Powell joked, "with most mainstream analysts and advanced-economy central bankers on board. I think I see some former shipmates out there today."
When it became evident that inflation was spreading from goods to services, the Federal Reserve pivoted and began hiking, ultimately adding 5.25 percentage points to its benchmark overnight rate that had been around zero following emergency cuts in the early pandemic days.
TRUMP RESPONDS TO BIDEN'S DECISION TO PARDON HUNTER—IN TRUE TRUMP FASHION!
Powell attributed the rise in inflation to "rapid increases in the demand for goods, strained supply chains, tight labor markets, and sharp hikes in commodity prices." He credited the Federal Reserve's actions and the public's confidence in the institution for the economy's ability to avoid a sharp downturn during the hiking cycle.
WATCH: NY SENATOR WANTS TO SECEDE
"The FOMC did not flinch from carrying out our responsibilities, and our actions forcefully demonstrated our commitment to restoring price stability," he said. "An important takeaway from recent experience is that anchored inflation expectations, reinforced by vigorous central bank actions, can facilitate disinflation without the need for slack."
Powell concluded by acknowledging that there is still "much to be learned" from the experience, adding, "That is my assessment of events. Your mileage may differ."
