FED CHAIR POWELL SIGNALS FURTHER RATE CUTS POSSIBLE AS JOB MARKET WEAKENS

🔹 Powell stated that the Fed cut interest rates by 0.25% last week due to a weakening labor market, despite inflation remaining above the 2% target.

🔹 He believes that the current monetary policy is still somewhat tight and the Fed is ready to cut interest rates further if the job market continues to slow down.

🔹 Job growth has sharply decreased, recently creating fewer than 30,000 jobs per month, and new data shows that the U.S. has about 1 million fewer jobs than previously reported.

🔹 Inflation has cooled from its peak in 2022 but remains around 2.7% overall and 2.9% when excluding food and energy.

🔹 President Trump's tariffs may cause temporary price increases, but Fed economists believe this is only a short-term effect.

🔹 Powell said that stock prices currently seem to be valued quite high, indicating that he is cautious about the stock market.

🔹 Powell stated that there are two risks existing simultaneously.
➤ The job market weakens (risks to employment)
➤ Prices may rise (risk of inflation), this is a mild form of stagflation.

🔹 The Fed's vote on continuing to cut interest rates was very close (10–9) and some officials like Governor Michelle Bowman warned that the Fed may be acting too slowly to support the labor market.

🔹 Powell emphasized that the Fed will protect jobs while controlling inflation and will cut interest rates further if the job market continues to weaken.