The Federal Reserve is ready to cut interest rates, confident that inflation is easing to normal levels and wary of any more slowing in the job market.
“The time has come for policy to adjust,” Fed Chair Jerome H. Powell said Friday, in his most anticipated speech of the year. “The direction of travel is clear.”
Powell did not specify a timeline, or forecast how much Fed leaders were preparing to lower rates. But his remarks came as close as possible to teeing up a cut at the Fed’s next policy meeting in mid-September. Rates currently sit between 5.25 and 5.5 percent, where they have remained since July 2023. The open question now is whether officials will opt for a more aggressive cut next month — a half-point instead of a more typical quarter-point.