The US economy remains strong, and the Federal Reserve System (Fed) intends to maintain it in this state, Federal Reserve Chairman Jerome Powell said at the annual meeting of the National Association for Business Economics (NABE). Powell also noted that the Fed is trying to reduce inflation, while preventing a significant increase in unemployment. The Fed's recent decision to lower the interest rate by 50 basis points (bp) reflects confidence that the adjustment of monetary policy will maintain the stability of the labor market with moderate economic growth and a reduction in inflation to the target 2%. This is what is called a «soft landing» of the economy. According to the median forecasts of the Fed's management, the base rate will be reduced by another 50 bps by the end of 2024, from the current level of 4.75-5% per annum. «If the economic situation develops according to our forecasts, we will cut the rate twice by 50 bps,» Powell said, stressing that further decisions will depend on incoming economic data. The main goal is to bring the rate to a neutral level, which, according to the Fed's estimates, is about 3%.
