WASHINGTON (Reuters) – Federal Reserve Chair Jerome Powell said on Monday the three inflation readings over the second quarter of this year showed “more progress” was being made on bringing the pace of price increases back to the Fed’s target.
“In the second quarter, actually, we did make some more progress,” Powell said at an event at the Economic Club of Washington. “We’ve had three better readings, and if you average them, that’s a pretty good place.”
Powell’s remarks are likely his last until his press conference following the Fed’s July 30-31 meeting.
Fed governors Christopher Waller and Adriana Kugler as well as other top Fed officials speak this week, comments that may further frame the central bank’s thinking at a key moment in their deliberations.
Inflation is edging closer to the central bank’s 2% target, and policymakers are increasingly concerned about slowing the economy too much and causing the unemployment rate to rise.
Given what policymakers believe to be an increasingly balanced set of risks, they may well use their final comments ahead of this month’s meeting to either flag that rate cuts are imminent or explain why recent data still doesn’t warrant a turn to easier monetary policy.
The betting among investors has tilted strongly towards the Fed starting rate cuts in September. Changes to the policy statement in July could provide a strong signal of that by updating how inflation is described and assessing how recent data has added to policymakers’ confidence that the pandemic-era outbreak of inflation has subsided.
(Reporting by Howard Schneider; Writing by Dan Burns; Editing by Andrea Ricci)
