Jerome Powell is the Federal Reserve Chairman, and on Tuesday declared that the financial crisis from 2008 is the first factor that accelerated a lot of changes in the U.S. A lot happen, such as slow growth, lower interest rates, and a little inflation. Powell spoke in Paris at an economic conference and explained everything about the depth of the Great Recession from 2008.
The Chairman says that the Great Recession from 2008 and the beginning of 2009, is the one that influences the growth and inflation in the United States, as well as other countries. The percentage point is currently lower than before right now. Powell is also saying that the Fed will prepare to lower the policy rate because of the slowing global growth, even if the U.S labor market is active. This will happen for the first time in a decade, so what Powell wants to send is an important signal.
Also, the Fed is monitoring all the developments, and they want to be careful about the U.S economic standpoint and inflation. By supervising all of this, they will have thee needs necessary to sustain the expansion. Thanks to Powell’s declarations, the stock market recorded a high increase. The conference from Paris made economists believe that the Fed will lower its benchmark rate from 2.25% to 2.5% in two rounds. The first will be around the July meeting, and the second one will be around September.
Finally, Powell is saying that the growth and inflation, as well as the lower rates of interest, are everywhere in the world. So because of that, other countries and the U.S are facing active labor markets and a flat unemployment rate. The idea is that the Fed shouldn’t have the reasons for cutting rates in case the economy is getting weak, but operating in a low policy rate environment.