Fed spokesperson: Powell may open up space for further rate cuts

Nick Timiraos, the "Federal Reserve's Voice," recently wrote: Federal Reserve Chairman Powell said that even after last week's rate cut, he still believes the Fed's interest rate stance "remains slightly tight," suggesting that there is room for more rate cuts this year if officials continue to judge that recent labor market weakness outweighs inflation setbacks. Powell largely reiterated the views he expressed at the press conference following last week's rate cut. He emphasized the challenges the Fed faces in achieving its twin goals of maintaining low and stable inflation and promoting a healthy labor market. "Two-way risks mean there is no risk-free path," Powell said. "Cutting rates too much, too quickly could keep inflation close to 3% rather than the Fed's 2% target, while maintaining a restrictive policy stance for too long could unnecessarily weaken the labor market." Powell also reiterated his view that slowing job growth this summer necessitated last week's policy shift to focus more on the labor market than earlier this year. The slightly tighter rate setting puts the Fed in a good position to respond to potential economic developments. (Jinshi)