WASHINGTON — Inflation in the United States is slowing again after higher readings earlier this year, Federal Reserve Chair Jerome Powell said Tuesday, while adding that more such evidence would be needed before the Fed would cut interest rates.
“We just want to understand that the levels that we’re seeing are a true reading of underlying inflation," he added. “Getting the balance on monetary policy right during this critical period — that’s really what I think about in the wee hours,” Powell said in response to a question about his top worries.
In his appearance Tuesday, Powell said the U.S. economy and job market remain fundamentally healthy, which means the Fed can take its time in deciding when rate cuts are appropriate. Most economists think the Fed's first rate cut will occur in September, with potentially another cut to follow by year's end.
Powell declined to signal any time frame for a rate cut. Investors are betting that there is nearly a 70% chance for a reduction at the Fed's meeting in September. Mary Daly, president of the San Francisco Fed, cautioned last week, though, that it was “hard to know if we are truly on track to sustainable price stability.”
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