Powell expressed cautious optimism about inflation 🎯

On the second day of testimony before Congress, Fed Chair Jerome H. Powell expressed cautious optimism about inflation trends, acknowledging some confidence that inflation is headed lower:

• Powell emphasized that he is not yet sufficiently confident to declare a sustainable decline to the 2% target.
• He underscored the importance of continued positive inflation readings to build greater confidence.
• The Fed aims to ease policy before inflation reaches the 2% level.
• Powell acknowledged the significant progress made on inflation.
• He indicated that the Fed's current policy remains restrictive.
• Powell highlighted that the economy is growing at an approximate rate of 2%.
• Inflation and job numbers are favorable.
• The neutral interest rate has likely moved up at least in the short term.
• Powell stressed the need for more time to shrink the balance sheet.
• His testimony underlined the Fed's cautious approach.
• The focus is on ensuring that inflation trends downwards sustainably before making any policy adjustments.