The Chairman of the US Federal Reserve Jerome Powell signaled a benchmark interest rate cut is likely at the Fed’s policy meeting on September 17-18. During a moderated discussion in Zurich on Friday, Powell said that the central bank has through the course of the year seen fit to cut the expected path of interest rates to support the economy.
Powell seemed to acknowledge that investors’ expectations of lower interest rates have supported the financial market and business confidence this year, and failing to meet at least partly those expectations could damage a favorable US economic outlook.
The Fed cut its benchmark interest rate by 25 basis points in July. Now, Fed policymakers are expected to deliver another cut at the upcoming policy meeting. However, Powell tried to push back against those expectations by citing robust US labor market and dismissing worries on an economic recession.
Powell also refused to consider electoral politics in taking any monetary policies. He said the Fed would serve American regardless of their political party. The Chairman has been under pressure from President Donald Trump for not cutting rates aggressively.
