The Fed Reserve Chairman Jerome Powell has told the American people that the rates will come down if it remains this stable.
So Far, So Good
According to the Federal Reserve Bank, things are looking excellent in terms of “stability,” which seems to be a good sign. Jerome Powell and the Fed have encouraged Americans that things are looking up and will possibly be even better by September.
Aligning Goals and Giving Feedback
The Federal Reserve Bank Chairman spoke at last month’s Federal Open Market Committee (FOMC) press conference, touching base on economic progress.
2% Goal Progress Doing Well
Employment and inflation balance is crucial, according to the Fed. At this stage, that balance is doing well. According to the Federal Open Market Committee, the recent months showed good progress towards the 2% inflation goal.
No Deductions Until Goals Are Met
While progress is ongoing, the Fed still cautions that there is still some way to go before the 2% target is reached. The inflation rate can only be brought down once the actual target is met.
September Could Be D-Day
It’s expected that some form of confirmation regarding the decrease in the inflation rate will truly be announced for September, however, the Fed did not give any surefire hints.
Reassuring for the Better
Jerome Powell was described as “dovish” when addressing the media, reassuring that the “normalization of the labor market and improved inflation” would result in the action of a rate cut.
Inflation Rate Cut Is Delayed
The Fed chairman said that he and his co-workers “decided to leave the policy interest rate unchanged in favor of securities.”
Still Focused on the Main Goal
However, that didn’t mean there was no intention of changing it; instead, as it progressed, the fed pushed out the time a bit more to try and meet the goal of balancing the labor market and economy.
Keeping Supply Demand
It’s not easy to maintain balance, but Powell said the Fed wants to keep up with the current supply-demand while lowering inflation pressure.
GDP and Consumer Spend Looks Solid
Powell also said that the “Gross Domestic Profits (GDP) growth moderated to 2.1% at the start of this year, down from 3.1%” He also noted that even though domestic growth has slowed down compared to before, it is still going strong.
How Are Consumers Coping?
The average household and breadwinners are doing all they can to cope with inflation and lack of work.
Refinancing Homes
Even though it seems like there is a good amount of economic consumer spend, that doesn’t mean consumers are doing fine. American consumers were reportedly refinancing their homes at very low interest to help meet the rising costs, according to U.S News.
Consumers Feel the Expenses
Consumers feel every bit of the rising prices of groceries, diesel, and gas. Even property rentals have become more expensive to some than the cost of purchasing a home.
Buying a Home Can Take Longer for Some
For many younger Americans buying a first home can take longer now than it might have a few years back.
Good Hopes For Future Housing
According to reports, real estate has seen a small surge in the buyer’s market after July. This was measured by a growth in sales at over 4%.
Consumers Want To Know What They’re Paying
Alliance Bernstein’s director of economic research and markets, Eric Winograd said that most consumers care about “what something costs.” Consumers don’t really consider the “inflation measures” and “rate changes,” he added.
Good Chances if Progress Is Achieved
Powell explained that surely if everything were balanced and doing better, an inflation cut would be definite.
No Progress Could Mean No Cut By Year End
However, the Fed would have to weigh things if things weren’t going well. For instance, the state of the economy, “inflation data,” “employment data,” as well as “the balance of risks,” the chair said.
Fed Is Working Towards Better Economy for U.S.A.
Furthermore, the Chairman added that the Fed shall continue doing all it can to ensure the goals are met regarding jobs and the economy. Powell further said that the economy would be guided by the path forward and based on thorough statistics, amongst other valuable data.
The Wait Continues
Given the latest feedback from the Fed, it looks like Americans will have to hang on a while longer before the cut in inflation finally arrives.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
