Fed Chair Powell details two potential economic paths that could lead to rate cuts

You didn’t mention the idea that rates are at a peak for the cycle and didn’t mention the idea that it might be appropriate to cut rates later this year. As you have a previous press conferences, so has the Fed sort of dropped its easing bias? Where are you standing on that so one? Let let me address cuts. So obviously our decisions that we make on our policy rate are going to depend on the incoming data, how the outlook is evolving and the balance of risks as always. And we’ll look at the totality of the data. So I think and we think that policy is well positioned to address different paths that the economy might take. And we’ve said that we don’t think it would be appropriate to dial back our restrictive policy stance until we’ve gained greater confidence that inflation is moving down sustainably toward 2%. So for example, let me take a pass. If we did have a path where inflation proves more persistent than expected and where the labor market remains strong, strong, but inflation is moving sideways and we’re not gaining greater confidence, well that would be a case in which it could be appropriate to hold off on rate cuts. I think there’s also other paths that the economy could take which which would. ‘Cause us to want to consider rate cuts and those would be two of those paths, would be that we do gain greater confidence, as we’ve said. If that inflation is moving sustainably down to 2% and another path could be you know an unexpected weakening in the labor market for example. So those are paths in which in which you could see us cutting rates. So I think there it really will depend on the data in terms of in terms of peak rate, you know I think really it’s the same question I I I think the data will will have to answer that question for us well and could you just follow on the path where you might not cut is that? You mentioned that would be inflation persistent. I mean is inflation, would that be the key data in making that decision or could you expand a bit more on that? Thank you. Again it’s so it’s we’ve set ourselves a test that we for us to begin to reduce policy restriction. We’d want to be confident that inflation is moving, you know, moving sustainably down to 2%. And for sure, one of the things we’d be looking at is the performance of inflation. We’d also be looking at inflation expectations, be looking at the whole story. But clearly incoming, incoming inflation data would be at the very heart of that, of that decision.