04/04/2024

Powell Sticks with Fed's Cautious Rate-cut Strategy

The agency is working hard to keep inflation low

On Wednesday, Federal Reserve officials, including U.S. central bank chief Jerome Powell, continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June.

"Recent readings on both job gains and inflation have come in higher than expected," Powell said in a speech to the Stanford Graduate School of Business. While policymakers generally agree that rates can fall later this year, he said this will happen only when they "have greater confidence that inflation is moving sustainably down" to the Fed's 2 percent target.

His remarks repeated language the Fed has adopted as it tries to balance the risks of cutting interest rates before inflation is truly controlled with the risks of suppressing economic activity more than is needed.

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