In a speech at the National Bank Forum in Jackson Hole, Wyoming, US Federal Reserve Chairman Jerome Powell gave financial markets the long-awaited signal for an interest rate turnaround in September. “It is time to adjust monetary policy,” said the head of the Fed, as the central bank is called in the US. The direction is clear, he added, with a view to easing. The timing and pace of the interest rate cuts will depend on incoming data, the outlook and the risk assessment.
In July, the US monetary authorities had already discussed a reduction in the key interest rate, which they have kept in the range of 5.25 to 5.50 percent for over a year. Although they shied away from a lower step, they were actually considering a reduction. A majority of economists recently surveyed by the Reuters news agency expect the key interest rate to be cut by a quarter of a percentage point on September 18th: further downward steps could follow in November and December.