Optimists expecting interest rate cuts were disappointed

Jerome Powell, the chairman of the US Federal Reserve System (FRS), at the end of last week disappointed the market’s expectations of aggressive interest rate cuts, saying that it is too early to report a victory in the fight against inflation.

Despite a string of positive recent indicators on prices, the central bank governor said the FRS plans to keep policy accommodative until policymakers are confident inflation is firmly returning to 2%, reports CNBC.

“It would be premature to conclude that we have reached a sufficiently restrictive stance or to speculate on when monetary policy might be eased,” Powell said. He added that he is ready to further strengthen the policy if necessary.