U.S. Treasury chief says Fed's rate cut 'very positive sign' for economy

U.S. Treasury Secretary Janet Yellen said Thursday that the Federal Reserve's interest rate cut of 50 basis points is "a very positive sign" for the American economy.

Yellen said the Fed's jumbo cut "reflects confidence" for the central bank that inflation has come down significantly and is on a path back to the bank's 2% target.

Risks regarding inflation have "meaningfully diminished," she told the Atlantic Festival 2024 in Washington, D.C.

The Treasury head said wages are rising at a good pace, faster than inflation, so employees are getting ahead in real terms.

Fed Chair Jerome Powell told a post-meeting news conference Wednesday that the labor market is in "solid condition" and the U.S. economy is in "good shape."

"The upside risks to inflation have diminished and the downside risks to employment have increased, as inflation has declined and the labor market has cooled," he said.