First Remarks By Fed Chair Before Lawmakers As Investors Lend All Ears

The US Federal Reserveis not in a rush to cut its short-term interest rate again due to an “strong overall” economy, low unemployment, and inflation that remains above the Fed’s 2% target. Fed Chair Jerome Powell stated that the economy is strong overall and has made significant progress toward its goals over the past two years. Powell emphasized that reducing policy restraint too fast or too much could hinder progress on inflation, and further cuts would hinge on inflation declining and the job market remaining healthy.

Powell’s Testimony – Key Quotes

“Policy is well-positioned to deal with risks, uncertainties.”

“We can maintain policy restraint for longer if economy remains strong and inflation does not move toward 2%.”

“We can ease policy if labor market unexpectedly weakens or inflation falls more quickly than expected.”

“The US is economy strong overall; inflation is closer to 2% goal but still somewhat elevated.”

“Fed’s framework review will not include a focus on inflation target, which will remain 2%.”

“Fed will wrap up framework review by late summer.”