By Nicholas Jasinski
Federal Reserve Chair Jerome Powell is set to speak alongside other global central bank heads on Tuesday, days after a promising inflation report.
The monetary-policy world has converged on Sintra, Portugal, this week for the European Central Bank's annual Forum on Central Banking. Powell will take part in a moderated panel discussion with ECB President Christine Lagarde and Roberto Campos Neto, governor of the Banco Central do Brasil, at 9:30 a.m. Eastern.
On Friday, government data showed that the personal consumption expenditures price index -- the Federal Reserve's preferred inflation measure -- was practically unchanged in May. That was a return to a pace of monthly inflation last seen in the fall of 2023 and a welcome reading for those rooting for interest-rate cuts in 2024.
"We had really, really good inflation data in the second half of last year, then kind of a pause in progress in the first quarter," Powell said at a press conference after a meeting of the Federal Open Market Committee meeting on June 12. "What we took away from that was that it's probably going to take longer to get the confidence that we need to begin to loosen policy."
The FOMC -- the Fed's policymaking body -- has held the federal-funds rate target at a range of 5.25% to 5.5% since July 2023. It next meets on July 30-31.
On Monday, pricing in the market for interest-rate futures implied a less than 10% chance that the target could be reduced by a quarter of a percentage point then. Futures are pricing in about 65% odds of a cut at the Fed's September meeting.
Write to Nicholas Jasinski at nicholas.jasinski@barrons.com
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July 02, 2024 08:43 ET (12:43 GMT)
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