Fed Chair Powell Suggests Possible Rate Cuts Amid Balanced Economy

Fed Chair Jerome Powell informed Congress that the U.S. job market has cooled from pandemic extremes, making the case for interest rate cuts stronger. Powell emphasized the importance of data-driven decisions and the Fed's independence. Analysts predict a potential rate cut in September due to improved inflation data.

Fed Chair Jerome Powell testified to Congress that the U.S. is no longer an overheated economy, with job markets returning to pre-pandemic levels. This situation strengthens the argument for potential interest rate cuts.

Powell addressed the Senate Banking Committee, emphasizing the balanced risks the economy faces now, rather than focusing solely on inflation. He avoided giving clear signals about the timing of future actions, stressing the need to base decisions on evolving economic data.

With a presidential election approaching, Powell faced questions from both parties regarding the risks to the job market from delayed rate cuts and the strain on households from persistent inflation. Analysts anticipate that the foundation is being laid for a rate cut as soon as September.

(With inputs from agencies.)