S&P 500, Nasdaq eye fresh records as Powell notes inflation progress

Federal Reserve chair Jerome Powell spoke publicly on Tuesday for the primary time for the reason that Fed’s preferred inflation gauge showed prices increased at their slowest pace in greater than three years through the month of May.

While still showing signs of caution, Powell admitted the info has been in the appropriate direction recently.

Yahoo Finance’s Jennifer Schonberger reports:

Powell said Tuesday that he is inspired by cooler inflation but reinforced that the central bank might want to see more evidence before cutting rates of interest.

The last two inflation readings in April and May “do suggest that we’re getting back on a disinflationary path,” Powell said speaking on a panel in Portugal for a European Central Bank conference.

Powell’s comments come days after the most recent reading of the Fed’s preferred inflation goal — the “core” Personal Consumption Expenditures (PCE) index — rose 2.6% in May, in step with expectations and down from 2.8% in April.

On a month-over-month basis, the inflation measure rose 0.1%, also in step with expectations and down from 0.2% in April.

The reading offered recent support for rate cuts later this yr, easing concerns that mounted through the first quarter that hotter-than-expected inflation could upend plans for an loosening of monetary policy in 2024.

Despite one other positive signal that inflation is easing, the central bank is not prone to cut rates at its next meeting in late July.

Powell declined to reply an issue about whether the Fed could cut as soon as September.

As an alternative, he underscored the Fed will need more time and evidence that inflation is moving sustainably right down to its 2% goal, noting that the central bank can afford to be patient given a powerful job market that’s cooling steadily.

“We have made plenty of progress,” said Powell. “We just want to know that the degrees that we’re seeing are a real reading on what is definitely happening with underlying inflation.”

Leave a Comment

Copyright © 2024. All Rights Reserved. Finapress | Flytonic Theme by Flytonic.