The president of the American Federal Reserve, Jerome Powell, hinted that an interest rate cut could occur soon, despite ongoing concerns about inflation.
# Signals in favor of a rate cut
Jerome Powell indicated that "the slowdown in the labor market could justify a loosening of monetary policy." However, he specified that the Fed would continue to closely monitor economic data before making any decisions.
# Inflation still above target
Despite these signals of easing, the Fed chairman emphasized that inflation remains above the 2% target, which could limit the magnitude or speed of future rate cuts.
A revised strategic framework
Powell also announced a revision of the strategic framework of monetary policy, with a focus on greater flexibility to better adapt to changes in the American economy, particularly regarding productivity and fiscal policies.
Market reaction
Following this speech, U.S. stock indices recorded an increase, a sign that markets anticipate a rate cut in the coming months. However, investors remain cautious in the face of ongoing uncertainties related to inflation.