Powell says Fed needs more inflation evidence before cutting interest rates

federal reserve Chairman Jerome Powell He stressed on Wednesday that policymakers needed more evidence that inflation was calming before moving to cut rates.

“When it comes to inflation, it’s too early to tell whether the recent numbers indicate anything more than just an increase,” Powell said in prepared remarks ahead of a question-and-answer session at Stanford University. “We do not believe it is appropriate to lower the policy rate until we have greater confidence that inflation is falling sustainably towards 2%,” he said.

Powell’s comments came amid concerns on some Wall Street that inflation progress is stalling. Inflation has fallen significantly from its peak of 9.1%, but progress since the summer has been roughly flat.

Policymakers have sharply raised interest rates over the past two years, approving 11 hikes in hopes of curbing inflation. cool the economy. In just 16 months, interest rates rose from near zero to more than 5%, marking the fastest pace of tightening since the 1980s.

Fed officials are now wondering when to take their foot off the brake. Powell said officials will balance the risk of cutting rates too soon and reigniting inflation, and the risk of waiting too long to cut rates, which could strain the economy and harm the economy. He said that he is doing so. cause a recession.

The Fed’s fight against inflation is weighing heavily on middle Americans.

At its March meeting, the Federal Open Market Committee voted to keep interest rates unchanged at 5.25% to 5.5%, the highest level in 22 years. Officials also indicated that three rate cuts this year remain likely, but reiterated that the timing of the cuts would depend on the trajectory of inflation.

Officials plan to hold their next meeting from April 31st to May 1st.

This is a developing story. Please check back for the latest information.