US Fed chair takes a step towards interest rate cut
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Jerome Powell, chairman of the US Federal Reserve, indicated that the central bank is likely to lower interest rates in the near future. Powell stated that the Fed has made progress in reducing inflation but would need more data to confirm sustainable movement towards the target rate of 2 percent. He highlighted a 'cooling' labor market as a reason for potential rate cuts. Concerns have been raised about the increase in the unemployment rate, which could accelerate in the coming months. Powell emphasized that the labor market is not a source of broad inflationary pressures. The suppression of wage rises has been attributed to the role of trade union bureaucracy. Democratic senators expressed the need for rate cuts, while Powell did not provide a specific timeline. The rise in US debt and potential risks to the financial system were not addressed in the hearing. The Basel III Endgame, a new system of bank regulation, has faced opposition from major banks. The campaign against the regulations has gained some success. The US financial regulatory authorities have differing views on the implementation of the Basel III Endgame. Political considerations may be involved in the further review of the regulations. Private equity firms, which are largely unregulated, have been identified as a potential source of major financial turbulence.

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https://www.wsws.org/en/articles/2024/07/11/zyla-j11.html