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227 sats \ 1 reply \ @398ja 5 Feb \ on: Fed Chair Jerome Powell: The 2024 60 Minutes Interview econ
Key moments:
- Jerome Powell is the chair of the Federal Reserve and has overseen 11 interest rate hikes to cool inflation. While this raised concerns of a recession, inflation is now falling without a recession occurring.
- Powell believes inflation has come down significantly but the job of reducing it to the 2% target is not done yet. More evidence is needed that inflation is sustainably falling before rate cuts.
- The Fed aims to return inflation to its long-term 2% target to restore price stability for the public's benefit. Powell wants more confidence inflation will fall to 2% before cutting rates.
- Powell sees the current economy as strong with solid growth and a low 3.7% unemployment rate, allowing a careful approach to rate decisions.
- Inflation has fallen from over 9% to around 3% but Powell is not committed to getting it all the way to 2% before rate cuts, just wanting to see more good data.
- Powell acknowledges the Fed was too slow to recognize inflation in 2021 and should have tightened policy earlier to curb price increases.
- A rate cut is not likely at the next meeting in March but could occur by the May meeting if inflation data remains stable.
- Future rate cuts would likely be quarter or half point decreases to support the economy without rekindling inflation.
- Powell does not foresee a repeat of the 2008 banking crisis but some smaller regional banks may face challenges from commercial real estate declines.
- Powell expresses concern over the unsustainable rising national debt burden on future generations.