The time has come

Yesterday's speech by the head of the Federal Reserve (FED) Jerome Powell in Jackson Hole gave clear indications of an upcoming policy rate cut in September. The head of FED said his confidence has increased that inflation is on a sustainable path toward the 2 percent target, that inflation has fallen significantly and is now much closer to the target and the worst of the pandemic-related disruptions have now abated.

Mr. Jerome Powell also pointed out that the central bank does not want to see a further decline in the labor market. He said quote "The labor market is no longer overheated and conditions are less tight than they were before the pandemic. We are not seeking or welcoming a further cooling of labor market conditions." unquote. According to Jerome Powell has the time has come and the direction is clear while the timing and speed of descent depends on incoming data points.

In contrast to Sweden's Erik Thedéen who is not receptive to his surroundings, Jerome Powell seems to put the country's best interests first and will act instead of react.