Jerome Powell's new approach on interest rate cut in relation to inflation reaching 2%
Jerome Powell, the Chair of the Federal Reserve, stated in a recent comment that the institution does not necessarily need inflation to reach the 2% target for an interest rate cut. This change in approach by the Federal Reserve could pave the way for an earlier reduction in interest rates. Previously, financial markets and analysts believed that the Federal Reserve would only initiate an interest rate cut after inflation reached the 2% target. However, Powell’s new stance indicates that the US central bank can adjust its contractionary policy by observing a sustainable downward trend in inflation.
