The US Federal Reserve Chairman Jerome Powell says that the Federal Reserve does not need to hurry to lower the interest rate, even though the inflation statistics are pointing in the right direction.
We can afford to wait, says Powell, pointing to the strong labor market in the US.
The Fed Chairman is participating in a panel with other central bank governors in Portugal. In addition to Powell, participants include, among others, Christine Lagarde, head of the European Central Bank (ECB).
Powell says that the Fed has "made great progress" in fighting inflation. In the latest American interest rate decision, from June, only one interest rate cut was hinted at during 2024. The market believes it will come in September, but Powell does not want to comment on that.
We are well aware that a premature cut could erase the progress we have made. If we act too late, we may unnecessarily undermine the recovery.
The Fed has left the interest rate unchanged in the range of 5.25-5.50 percent since July last year.
In June, the ECB lowered its interest rate for the first time since 2019. On Tuesday morning, statistics showed that inflation in the eurozone fell to 2.5 percent in June.
It's good, but we still believe it will be a bumpy ride for the rest of 2024, says Christine Lagarde.
