Powell "joins" the dovish camp, saying economic risks make more sense for rate cuts
2025-08-22 14:11:41
On August 22nd, Federal Reserve Chairperson Jerome Powell said that < b > constantly "changing" economic risks give the Federal Reserve a stronger reason to cut interest rates. The remarks show that Powell is in the "dovish" camp of the FOMC, which is responsible for setting interest rates, and also signal that he may support the Federal Reserve to cut interest rates by 25 basis points at its next meeting in September. While Powell acknowledged that the impact of the government's trade war on consumer prices is now "clearly visible", he hinted that the impact is unlikely to last and may instead be a one-off shock that the central bank can ignore. "Given the fact that the labour market is not particularly tight and there are increasing downside risks, this outcome [of rising inflation] seems unlikely," he said, adding that "there are upside risks to inflation and downside risks to employment, which is a challenging situation".
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