Jul 2, 2024
Here Are the Key Takeaways From Powell, Lagarde Panel at ECB Forum
, Bloomberg News
(Bloomberg) -- Here are the key takeaways from Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde and Brazilian central bank chief Roberto Campos Neto’s discussion on a policy panel at the ECB Forum on Central Banking in Sintra, Portugal on Tuesday:
- Powell offered a balanced and not especially hawkish outlook for US monetary policy, repeatedly citing progress the central bank has made in bringing inflation lower. The latest data “do suggest that we’re getting back on a disinflationary path,” he says. The Fed wants to see “more data like what we’ve been seeing recently” and then can lower rates.
- While he declined to signal a September rate cut specifically, Powell said the risks between inflation and the labor market are coming into better balance. Still the Fed can be patient for now. The chair said: “We’re getting a gradually cooling economy, a gradually cooling labor market, progress on inflation, 4% unemployment, 2% growth. We’re getting kind of what we want to have.”
- No news as such from Lagarde, but a good overview of the topics keeping policymakers in Europe up at night: sticky services inflation that needs close monitoring to ensure the ECB doesn’t cut interest rates faster than appropriate, geopolitical risks that threaten economies in the region’s east, and protectionism that could undermine innovation and thus growth.
- Also interesting was what Lagarde didn’t want to comment on: the future path for ECB rates — because officials vowed to be data-dependent — and the political situation in her native France, which is heading to the polls again this weekend.
- Brazil’s Campos Neto again avoided any political confrontation with President Lula. He did manage to get one point across: fiscal concerns are the main risk, and that’s feeding into the market’s recent volatility. Regarding his job of taming inflation, he expressed confidence price pressures will be lower than expected.
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