Fed's Powell: Latest inflation readings in 'a pretty good place'

• Jerome Powell, Federal Reserve Chair, said on Monday the three inflation readings over the second quarter of this year showed "more progress" was being made on bringing the pace of price increases back to the Fed's target.
• "In the second quarter, actually, we did make some more progress," Powell said at an event at the Economic Club of Washington. "We've had three better readings, and if you average them, that's a pretty good place." Inflation is edging closer to the Fed's 2% target, and policymakers are increasingly concerned about slowing the economy too much and causing a rise in the unemployment rate.
• Given what policymakers believe to be an increasingly balanced set of risks, they may well use their final comments ahead of this month's meeting to either flag that rate cuts are imminent or explain why recent data still doesn't warrant a turn to easier monetary policy.
• The betting among investors has tilted strongly towards the Fed starting rate cuts in September.  As of July 16, the CME Fed Watch Tool indicates a 91.4% probability of the Fed doing a 25 basis point cut in September up from the 70.2 % recorded the week prior (July 9). Changes to the policy statement in July could provide a strong signal that updating how inflation is described and assessing how recent data added to policymakers' confidence that the pandemic-era outbreak of inflation has subsided.

(Source: Reuters)