Jerome Powell at Jackson Hole Symposium: Timing for rate cut will depend on incoming data

Powell at Jackson Hole: The timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks, US Fed Chair Jerome Powell said while speaking at the Jackson Hole Symposium on Friday. The global financial markets across the world were keenly watching out for any hint of a rate cut in his speech. 

Talking about inflation he said, “ We have made a good deal of progress as far as taming inflation is concerned. And now upside risks to inflation have declined.” He also commented on inflation trajectory and said, “My confidence has grown that inflation is on a sustainable path back to  two per cent."

He also made a positive remark, the thing the market was watching out for.  He said, “The time has come for the United States to start cutting interest rates.” Powell sounded confident and satisfied with the progress made on controlling inflation. He added further that the confidence has grown that the battle against inflation is on the track. The inflation fell to 2.5 per cent last month, far below its peak of 7.1 per cent two years ago and only slightly above the central bank's two per cent target level. 

Federal Reserve Chair Jerome Powell is confident that the central bank will successfully thread the needle and deliver a so-called soft landing for the US economy. It would be a rare feat, last seen in the 1990s. Getting there will require easing off from today’s high interest rates, Powell said, setting up a likely September start to rate cuts. 

 According to Reuters,  Wall Street's main indexes opened higher on Friday as investors looked to a speech from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium for clues on the pace of rate cuts in the world's biggest economy. The Dow Jones Industrial Average (.DJI), rose 166.3 points, or 0.41 per cent, at the open to 40,879.12. The S&P 500 (.SPX), rose 31.8 points, or 0.57 per cent, at the open to 5,602.49​, while the Nasdaq Composite (.IXIC),  rose 153.4 points, or 0.87 per cent  to 17,772.727 at the opening bell.