The US Federal Reserve will cut interest rates before inflation drops to the target 2%. To start reducing the rate, it is enough to be confident that the inflation trend is going in the right direction. This was stated by the head of the department, Jerome Powell, in today’s (second in two days) speech to Congress.

This, in fact, is the only thesis that deserves attention from the entire speech (the speech is still ongoing). Although he is also predictable. Nobody said that the rate pause would be maintained until the target inflation level.

Other points from today's speech:

- We have made significant progress in the fight against inflation.

- I have some confidence in a further reduction in inflation, but I am not ready to say that this confidence is enough to achieve the target level of 2%.

- From macro data we need more confidence in reducing inflation.

- The current monetary policy of the US Federal Reserve is restrictive and does not depend on the election cycle.

- The Fed will continue to reduce its balance sheet (QT).

- The labor market is cooling quickly.