At the FED meeting held yesterday, Chairman Jerome Powell announced that it was decided to keep interest rates unchanged. Powell stated that the labor market is strong but the economy has not yet warmed up. He stated that long-term inflation expectations are well anchored and that the second quarter inflation data gives them confidence. He also emphasized that policy decisions are well positioned to offset risks and that they are committed to bringing inflation back to the 2% target.
Powell stated that a rate cut may be on the agenda in September and that no firm decision has been taken on this issue. He said that there are downside risks to employment, but that policy decisions will be made based on the totality of the data, without rushing. He added that the decision to keep interest rates unchanged at the meeting was supported by a strong majority. Powell stated that economic data should be followed and that they are trying to balance the risks of acting too early or too late.
