Federal Reserve Chairman Jerome Powell said Tuesday that it may take “more time than expected” for the central bank to gain confidence that inflation is sustainably falling to 2% and begin cutting interest rates. said that it was high.
“Recent data shows solid growth and continued strength in the labor market, but so far this year we remain on track for our 2% inflation target,” Powell said in a speech at the Washington Forum on the Canadian Economy. It also shows that there is no further progress in the return of the virus.”
“Recent data clearly does not give us much confidence and instead indicates that it will likely take longer than expected to achieve that confidence,” he later added.
The Fed has raised interest rates to 20-year highs over the past two years in an effort to curb inflation. The central bank has kept interest rates unchanged at its benchmark range of 5.25-5.5% since July last year as inflation showed signs of slowing.
Inflation has been trending upward in recent months, although it has fallen from a 40-year high of 9.1% in June 2022. Inflation rose 0.4% in March, or 3.5% from a year earlier, up slightly from 3.2% in February and 3.1% in January, according to new data released Wednesday.
The United States also sees rapid job growth through 2024, with the unemployment rate remaining below 4%, the longest streak since the late 1960s.
President Biden acknowledged last week that the latest inflation data could push the Fed to cut rates, while highlighting his administration’s overall progress on inflation.
“This could delay it by a month or so, but we don’t know about that. We don’t know what the Fed is going to do specifically,” Biden said.
“But look, we’ve brought inflation down dramatically from 9% to nearly 3%,” he added. “We’re in a better position than when we took office, when inflation was skyrocketing.”
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