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Federal Reserve Chair Jerome Powell said Thursday that the central bank's policymakers aren't in a rush to reduce interest rates to the so-called «neutral rate» and feel comfortable making adjustments to rates as it looks to bring inflation to its target.
In an event at the Dallas Regional Chamber, Powell said in his opening remarks, «We are moving policy over time to a more neutral setting. But the path for getting there is not preset. In considering additional adjustments to the target range for the federal funds rate, we will carefully assess incoming data, the evolving outlook, and the balance of risks.»
«The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully,» Powell explained. «Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve.»
In a question-and-answer session with Washington Post columnist Catherine Rampell, Powell was asked about how the Federal Reserve knows when it has reached the neutral rate and his past comments that «we know it by its works.»
FED CUTS INTEREST RATES BY QUARTER POINT
Fed Chair Jerome Powell said the central bank isn't in a rush to reach the neutral rate, and is in position to adjust as new economic data comes in. (Shelby Tauber/Bloomberg via Getty Images / Getty Images)
Powell explained that when the Fed moves the benchmark federal funds rate up or down, it has to have an «estimate of something that's kind of neutral, a level of
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