PANews reported on July 10 that when attending a hearing of the Senate Banking Committee, Powell, Chairman of the Federal Reserve, said that high inflation is no longer the only risk facing the US economy. The Fed is currently facing high inflation and a "cooling" labor market, and economic growth is also slowing down. Cutting interest rates "too late or too small will have an adverse impact on the economy." Powell also said that the Fed has made "considerable progress" in fighting inflation in the past two years, but has not yet achieved the Fed's goal of reducing inflation to 2%. Recent inflation data show "further progress" and the Fed needs more "favorable data." Regarding the Fed's future policy trends, Powell said that it is expected that there will be no interest rate hikes at the next meeting. As inflation "cools down," interest rates will be cut at the "right time."
The Federal Reserve previously announced on June 12 that it would maintain the target range of the federal funds rate at 5.25% to 5.5%. This is the seventh consecutive time that the Federal Reserve has maintained this interest rate range since September 2023. The next regular monetary policy meeting of the Federal Reserve will be held from July 30 to 31. According to CME's "Fed Watch", the probability of the Federal Reserve keeping interest rates unchanged in August is 95.3%, and the probability of a 25 basis point rate cut is 4.7%. The probability of the Federal Reserve keeping interest rates unchanged by September is 26.7%, the probability of a cumulative 25 basis point rate cut is 70.0%, and the probability of a cumulative 50 basis point rate cut is 3.3%.
