Jerome Powell Asked If Summer Economic Data Could Justify September Rate Cut: 'Is That Potentially Adequate?'

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During a press conference on Wednesday, Federal Reserve Chair Jerome Powell was asked whether jobs and economic data from the summer will be enough to inform a possible rate cut at the September Federal Open Market Committee meeting in September.

Transcript

00:00Thanks. Thanks, Chair Powell.

00:03There's a lot of lean in the markets,

00:05and not to mention out of the administration,

00:08for a rate cut now in September.

00:10Is that expectation unrealistic at this point?

00:15So, as you know, today we decided to leave our policy rate

00:20where it's been, which where I would characterize

00:22as modestly restrictive.

00:24Inflation is running a bit above 2 percent, as I mentioned,

00:28even excluding tariff effects.

00:30The labor market's solid, historically low unemployment.

00:33Financial conditions are accommodative,

00:35and the economy is not performing as though

00:38restrictive policy were holding it back inappropriately.

00:41So, it seems to me and to almost the whole Committee

00:46that the economy is not performing as though restrictive policy

00:49is holding it back inappropriately,

00:51and modestly restrictive policy seems appropriate.

00:54All that said, there's also downside risk to the labor market.

00:57In coming months, we'll receive a good amount of data

01:01that will help inform our assessment of the balance of risks

01:04and the appropriate setting of the federal funds rate.

01:07Just to follow up, by coming months,

01:09does that include the possibility you'll be getting essentially

01:12two rounds of jobs and inflation data between now

01:16and the September meeting?

01:18Is that potentially adequate to make a decision to lower rates at that point?

01:22So, you're right.

01:23We do have – this is an intervening period

01:26when we'll get two full rounds of employment and inflation data

01:29before the time of the September meeting.

01:31We have made no decisions about September.

01:33We don't do that in advance.

01:34We'll be taking that information into consideration

01:37and all the other information we get as we make our decision

01:40at the September meeting.

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