2 more rate reductions in 2025 a chance, says Fed’s Jerome Powell

The chairman of the Federal Reserve Jerome Powell said on Wednesday that although a slim majority of FED officials provided for at least two more rate reductions this year, such movements remain conditional for data and evolving risks. “We are not on a pre -set path,” he emphasized.

He also said that the risk of persistent inflation has decreased in recent months, with reference to a softer labor market and a slower GDP growth.

Although recognizing that rates contribute to price pressure, he noted that they look more like a “one -off price increase” instead of the start of an inflato cycle.

“Really, since April, for me, the risks of higher and more persistent inflation has probably diminished, and that is partly because the labor market has been softened, GDP growth has been delayed,” Powell said a press conference after the latest federal open market committee meeting.

Tarief effect on the consumer has been small so far: Powell

Powell said that the passage from rates to higher prices for consumers has been small so far, and the costs are largely absorbed by companies in the middle of supply chains.

“It is very clear that there is some passage,” said Powell during a press conference after the last policy meeting of the Central Bank. Companies involved in trade will tell you “that they intend to continue on time, but they don’t do that now.”

Powell said on Wednesday that the central bank is getting closer, but has not yet reached the point at which it has to stop its long -term balance wind effort, known as quantitative tightening.

Note that reserves in the financial system are still abundantly present, Powell said in a press conference after the last federal open market committee meeting that “we are getting closer” to a point where shrinking fed from cash and bonds can stop. But he added that the current Winddown is quite small and has no broader economic impact.