Unemployment Still At Historic Lows Powell

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Unemployment Still At Historic Lows Powell

Powell Speech - Unemployment Still At Historic Lows

Jerome Powell will answer questions before the Senate Committee on Banking and will also deliver a monetary policy report based on the semi-annual time period.

Powell has commented on how they are working towards improving the efficiency of supervising banks. He also talked about the recent NFP report, which showed an uptick in the unemployment rate.

According to him, the unemployment rate in the USA is still at historic lows. In simple words, the US Federal Reserve is not worried about the weakness of the labor market. However, he commented that the narrowing of the economy is related to the job creation.

As for any future policy actions by the Fed, he made it clear that no signals will be given today. So for those who were expecting the Powell to give a timeline on the rate cuts, that's not happening today.

He has also stressed the need of honesty when it comes to banks assessing their risks. After all, failure to properly assess the risks was what caused the 2008's financial crisis.

As for whether the Federal Reserve is confident about the progress of disinflation, he cited the need for more good data. So even though we had sufficient data recently, it seems that the Federal Reserve wants more.

He also highlighted how the US economy faces more risks, and elevated inflation is just one of them. As for the rate cuts, he added that they need a greater degree of confidence that inflation will head towards the 2% target before making any moves.

He added that the data from the Q1 was not enough to spur that confidence while the Q2 data is showing some progress. Against this backdrop, he added how the central bank is making decisions at each meeting as the situation continues to evolve.

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