Information Box: Summary of U.S. FRB Chairman Powell's remarks

July 3, 2024 12:21 AM GMT+9

Chairman Powell of the US Federal Reserve (FRB) expressed the view at a meeting hosted by the European Central Bank (ECB) held in Portugal on the 2nd that it is necessary for the FRB to confirm further data on slowing inflation before starting interest rate cuts.

The content of the statement is as follows.
*The labor market is still strong
*Signs of a resumption of the disinflationary trend
*Progress has been made in measures against inflation
*I'm returning to the path of disinfrey
*Further confidence is necessary before lowering policy interest rates
*Economic indicators such as those recently announced are even more necessary
*Significant progress has been shown in economic indicators
*Respond if the labor market weakens unexpectedly
*We have the ability to take the time to respond correctly
* Be fully aware of the risks of (responding) too quickly and too late
*Risks are becoming more balanced
*Service inflation is usually even more tenacious
*Wage inflation is trending downward toward a sustainable level, but it is still above equilibrium
*The labor market is cooling down
*Inflation is likely to return to 2% by the end of next year or the year after

*FRB policies are still restrictive and appropriate
*There is broad support for an independent FRB in the US
*Both parties support an independent FRB in the Bundestag
*The budget deficit is extremely large
*The path to budget deficits is unsustainable
*We need to tackle this problem sooner or later, the sooner the better
*Most people think there will never be a return to ultra-low interest rates, but no one knows
*One year from now, the inflation rate will be in the first half to the middle of the 2% range