Federal Reserve Chair Jerome Powell indicated Wednesday that the central bank is likely to begin reducing its benchmark interest rate soon, as inflation continues to decline toward the Fed's 2% target.
Speaking at a news conference following the Fed's latest policy meeting, Powell said the data increasingly supports a shift in monetary policy after more than two years of elevated rates.
Financial markets rallied on the news, with the S&P 500 climbing 1.4% and the Dow Jones Industrial Average adding more than 400 points in afternoon trading.
The Fed has held its federal funds rate at a 23-year high of 5.25% to 5.50% since last July in an effort to tame inflation that peaked at 9.1% in June 2022.
Economists widely expect the first rate cut to come at the Fed's September meeting, though the size of the reduction remains uncertain.
