Federal Reserve Chair Jerome Powell announced that interest rates might be reduced as early as September if the U.S. economy continues to meet expectations. This potential rate cut marks a significant shift as the Fed nears the end of its prolonged battle against inflation, coinciding with the upcoming presidential election campaign.
The Federal Reserve concluded its latest two-day policy meeting by maintaining the benchmark interest rate in the 5.25%-5.50% range, a level unchanged for the past year. However, the Fed's statement took a notable turn by softening its language on inflation, now indicating that the risks to employment are on par with the risks of rising prices. This more neutral stance suggests a willingness to lower rates after over two years of tightening credit.