Powell spoke. Open door for cutting interest rates in the USA

Perspectives under the base scenario and the sliding risk balance can justify the adjustment of the Fed's attitude in monetary policy – said the chairman of the American Federal Reserve Jerome Powell at the Jackson Hole Symposium.

“Perspectives under the base script and a sliding risk balance can justify adapting our attitude in politics (monetary – PAP),” said Powell.

“The stability of the unemployment rate and other labor market indicators allows us to carefully proceed when we are considering changes in our position,” he added.

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The head of the federal reserve estimated that the labor market seems “in balance”, although it is a “strange balance”, resulting from a significant slowdown in both supply and demand for employees.

“This unusual situation suggests that threats to employment are growing,” he noted.

Referring to duties, he assessed that in the base scenario they would cause one -time shift of prices up, but he would take some time before this effect is reflected in the economy.

“In a short risk period for inflation they tilt towards its raising, and for employment towards its lowering. This is a demanding situation,” he concluded.

Powell announced that the FED has adopted a new framework that “removes a reference to a central bank seeking to maintain inflation at an average of 2 % and reference to the decision on employment made on the basis of deficiencies in relation to its maximum level.”

According to Bloomberg's analysts, Powell's statement leaves a “open door” for cutting interest rates in September.

Investors have recently reduced the scale of plants to a rapid reduction in interest rates; They considered whether the Fed would remain cautious about the assessment of inflation or whether he would tilt more towards supporting a more fragile labor market.

At the same time, the pressure of the administration of President Donald Trump is growing for a reduction in the feet and divisions in the Fed Council (FOMC). Analysts predicted that in order to maintain all open options, the head of the FED will emphasize in Jackson Hole that the September federal reserve movement will be based on data on employment and inflation, which will be published at the beginning of next month. (PAP Biznes)

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