Fed signals move towards cutting interest rates

America’s central bank is moving closer to cutting interest rates following three straight months of falling price pressures, its chairman has signalled. Jerome Powell said policymakers had greater confidence that inflation was moving back to its 2pc target, adding that officials would not wait for price rises to return to that level before cutting borrowing costs. While Mr Powell would not be drawn on the timing of rate cuts, he said the economy was now in “much better balance”. Speaking at the Economic Club of Washington, Mr Powell said: “Our test for quite some time has been that we wanted to have greater confidence that inflation was moving sustainably down towards our 2pc target. And what increases that confidence in that, is more good inflation data. And lately, here we have been getting some of that.” The Fed’s preferred measure of inflation eased back in June, and currently stands at 2.6pc. Mr Powell said the last three inflation readings gave the Federal Open Market Committee that sets interest rates more confidence that the economy was cooling down, with signs that America’s jobs market “has indeed cooled off”. The Fed is tasked with both controlling inflation and supporting maximum employment. Mr...

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