Federal Reserve Chairman Jerome Powell said on Friday that he now had more confidence inflation was headed down to the central bank’s goal of 2%.

The Fed has kept its key interest rates at around 5.25-5.5% for more than a year to push inflation down to that goal. The inflation rate on Friday sat at around 2.5%, Powell said. In June 2022 it perched at around 9.1%, according to a White House statement.

Powell’s announcement came just days after the Labor Department corrected an earlier job count that was overly optimistic. The government counted roughly 818,000 jobs that didn’t exist during the 12 months before March 2024, according to the department. But even before the correction this week, recent workforce reports showed a decrease in the number of workers employers were hiring and an increase in the unemployment rate. Powell on Friday acknowledged the higher unemployment rate, but he attributed it to more people entering the workforce rather than more people losing their jobs.

Did Powell say when the interest rate cuts would come? The central bank would decide the timing of the rate cuts based on its assessment of incoming economic data, Powell said. He expressed confidence that inflation would continue to decrease even as the Fed employed rate cuts. The Fed’s current interest rate also gave it flexibility to respond to changes in the economic outlook, he added.

This story originally appeared in WORLD. © 2024, reprinted with permission. All rights reserved.