Jefferson's comments indicate Fed could start cutting rates in September: Evercore
Investing.com -- Data indicating a cooling in inflationary pressures in the U.S. may be encouraging, but it is still too soon to say if price growth in the world's largest economy is sustainably subsiding, according to Fed Vice Chair Philip Jefferson.
"This feels consistent with the idea that the Fed leadership is looking at September as the potential date for the first cut provided that a more definitive and sustained downshift in inflation emerges over the coming months," Evercore ISI economists said in a flash note. He noted in particular that a large pandemic-era spike in market rents is still being passed through to existing rents and may keep housing services inflation elevated for longer.
His comments were similar to sentiments voiced by Fed colleagues Raphael Bostic and Michael Barr elsewhere on Monday. Both officials stressed that they would still need to see more evidence that inflation is slowing back down to the Fed's stated 2% target before embarking on bringing down interest rates from more than two-decade highs.
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