Powell encouraged by cooler inflation data: ‘We are getting back on a disinflationary path’

Federal Reserve Chair Jerome Powell said Tuesday that he is encouraged by cooler inflation but reinforced that the central bank will need to see more evidence before cutting interest rates.

The last two inflation readings in April and May “do suggest that we are getting back on a disinflationary path,” Powell said while speaking on a panel in Portugal for a European Central Bank conference.

Powell’s comments come days after the latest reading of the Fed’s preferred inflation gauge — the “core” Personal Consumption Expenditures (PCE) index — rose 2.6% in May, in line with expectations and down from 2.8% in April.

That marked the slowest annual gain in more than three years.


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