Fed Chair says inflation in US 'eased substantially,' 50 bp rate cut reflects ‘growing confidence’ inflation falling to 2%

By Ovunc Kutlu

ISTANBUL (AA) - The US Federal Reserve Chair Jerome Powell said Wednesday inflation in the US "eased substantially" after the central bank delivered its first interest rate cut in more than four years.

The Fed on Wednesday lowered the interest rate by 50 basis points to the range of 4.75% - 5.0%, starting its monetary easing in an aggressive way.

Powell said the 50 basis points of rate cut reflects "growing confidence" among the Federal Open Market Committee (FOMC) members that inflation is falling down to 2%.

"We've been very patient about reducing the policy rate," he told post-meeting press conference. "(While) other central banks around the world cut (interest rates), many of them several times, we've waited."

"That patience really paid dividends in the form of our confidence that inflation is moving sustainably toward 2%," he added.

Powell added that the upside risks to inflation have diminished and the downside risks to employment have increased, as inflation has declined and the labor market has cooled.