The recent performance of the US economy has been "the best of any major economy in the world," Federal Reserve Chair Jerome Powell said Thursday, a week after the bank cut interest rates for a second consecutive meeting.
The US central bank recently started cutting back its key lending rates from a two-decade high, turning attention from tackling inflation to supporting the labor market as the rate of price increases has moderated.
There has been widespread anger about the cumulative impact of years of inflation, which has pushed up consumer prices by more than 20 percent since the onset of the Covid-19 pandemic.
But the economic facts today are clear, Powell said in Dallas, Texas, according to prepared remarks, noting that inflation was falling toward the Fed's long-term two percent target, the labor market was "solid", and economic growth remained resilient.
"The recent performance of our economy has been remarkably good, by far the best of any major economy in the world," he said.
Powell noted that inflation, as measured by the Fed's favored inflation gauge, was "running much closer" to the bank's target, but had not reached it just yet.
"We are moving policy over time to a more neutral setting," he said, referring to the level of interest rates over the long run that keep both inflation and unemployment in check.
"But the path for getting there is not preset," he added.
Powell said the Fed will likely cut its key interest rate slowly and deliberately in the coming months, in part because inflation has shown signs of persistence and the Fed's officials want to see where it heads next.
Powell said that inflation is edging closer to the Fed's 2% target, “but it is not there yet."