Washington. Federal Reserve Chairman Jerome Powell reiterated this Wednesday that the US central bank has time to deliberate on its first interest rate cut given the strength of the economy and recent inflation readings.
“Recent data on job growth and inflation have been stronger than expected,” Powell said in remarks prepared for a meeting at the Stanford Graduate School of Business. “Recent data, however, do not materially change the overall picture, which remains one of solid growth, a strong but rebalanced labor market, and inflation moving toward 2 percent on a sometimes bumpy path.”
“Given the strength of the economy and the progress on inflation so far, we have time to let incoming data guide our monetary policy decisions,” Powell said, with decisions made “meeting by meeting.”
“If the economy generally evolves as we expect,” Powell said, he and his Fed colleagues largely agree that a lower policy interest rate will be appropriate “sometime this year.”
But that will only happen once policymakers “have greater confidence that inflation is moving down sustainably” toward the central bank’s 2 percent target, according to Powell.
Inflation, by the Fed’s preferred measure, remains half a percentage point or more above the central bank’s target, and recent gains have been minimal. This has led some officials to rule out the need to lower interest rates until the end of the year.
Investors continue to expect a first rate cut at the Federal Reserve’s June 11-12 policy meeting, although the odds have been decreasing as data has improved. On Friday the report on March employment in the United States will be published and next week, new data on inflation.
It is still “too early,” Powell said, to judge whether the recent stronger-than-expected inflation is “more than just a blip.”
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– 2024-04-06 00:31:10
