Economics

Powell Says Fed Has Room to Cut, May Have Kept Policy Too Tight

Fed chairman says longer-run policy rate is likely lower now
Powell receives bipartisan support for Fed independence

Fed Chair Powell says monetary policy is not as accomodative as some thought.Source: Bloomberg)

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By Craig Torres and Reade Pickert

July 11, 2019 at 4:15 PM UTC

Updated on

July 11, 2019 at 7:40 PM UTC

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Federal Reserve Chairman Jerome Powell suggested that the central bank has room to ease monetary policy as the tie between the inflation and jobless rates has broken down.

“The relationship between unemployment and inflation became weak” about 20 years ago, Powell told the Senate Banking Committee Thursday. “It’s become weaker and weaker and weaker.”