Interest rates could be cut as early as September!
Federal Reserve Chairman Powell recently revealed that the Federal Reserve may take interest rate cuts as early as its September meeting. The news marks a major policy shift after keeping benchmark interest rates at their highest level in more than two decades.
"The key is that all the data, the changes in the outlook and the balance of risks must be consistent with our expectations for increased confidence in inflation and a solid labor market," Powell said in an interview with the media on Wednesday.
Just before these remarks, the Federal Reserve decided to continue to maintain the federal funds rate at a range of 5.25% to 5.5%, a level that has not changed since July last year.
Policy changes
After this meeting, the Fed's rhetoric changed significantly, and it began to consider more about the possibility of cutting interest rates instead of just focusing on inflation. Officials also downgraded their assessment of the labor market, which said that although job growth has slowed and the unemployment rate has risen, overall conditions remain good.
Despite this, the Fed has also made it clear that it will not easily cut interest rates until it is sure that inflation can continue to be controlled.
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