Federal Reserve Chair Jerome Powell stated that U.S. inflation may return to the 2% target by late 2025 or 2026, emphasizing a cautious approach to interest rate cuts. Speaking in Sintra, Portugal, Powell noted the labor market is cooling, with wage increases stabilizing. He highlighted significant progress in reducing inflation but called for more evidence to confirm a sustainable trend. U.S. stocks trimmed losses and 10-year Treasury yields dipped following his remarks. Traders remain hopeful for two rate cuts in 2024 despite the Fed’s conservative outlook.
