A key question for Federal Reserve Chair Jerome Powell and the 18 other officials on the Fed’s interest-rate-setting committee is how—or whether—recent inflation figures have altered their timetable for cutting rates.
In his remarks to Congress on Wednesday, Federal Reserve Chair Jerome Powell offered no hints on the potential timing of rate cuts.
In minutes from the Jan. 30-31 meeting released Wednesday, most Fed officials said they were worried about moving too fast to cut their benchmark interest rate before it was clear that inflation was sustainably returning to their 2% target.
Federal Reserve Chair Jerome Powell said in an interview broadcast Sunday night that the Federal Reserve remains on track to cut interest rates three times this year.
The Federal Reserve indicated Wednesday that it’s nearing a long-awaited shift toward cutting interest rates, a sign that its officials have grown confident that they’re close to fully taming inflation.
The average rate on a 30-year mortgage rose to 6.66% from 6.62% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.33%.
Officials “reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably.”
The markets have been on a celebratory tear in recent weeks, as signs pile up that the Federal Reserve may be done raising interest rates.
The Fed’s quarterly economic projections showed that its officials envision a “soft landing” for the economy, in which inflation would continue its decline toward the central bank’s 2% target without causing a steep downturn.
Wednesday’s report reinforced the belief that inflation pressures are cooling across the economy.
When its latest policy meeting ends Wednesday, the Federal Reserve is likely to provide some highly anticipated hints about the extent of rate cuts next year.
Inflation is slowing steadily, but it’s too early to declare victory or to discuss when the Federal Reserve might cut interest rates, Chair Jerome Powell said in prepared remarks Friday.
Christopher Waller, a member of the Federal Reserve Board of Governors, cautioned that inflation is still too high and that it’s not yet certain if a recent slowdown in price increases can be sustained.
At the same time, in a panel discussion at the International Monetary Fund, Powell did not rule out another rate hike to help reduce inflation to the Fed’s 2% target level.
Policymakers are grappling with how much more pressure to keep on an economy that has largely shrugged off the central bank’s moves to slow it down.
Besides making it more expensive for U.S. homebuyers to buy a house with a mortgage, higher yields also put downward pressure on prices for everything from stocks to cryptocurrencies. Eventually, they could help cause companies to lay off more workers.
Federal Reserve Chair Jerome Powell said Thursday that inflation remains too high.
Federal Reserve officials regarded the U.S. economy’s outlook as particularly uncertain last month, according to minutes released Wednesday, and said they would “proceed carefully.”
The U.S. labor market remains strong despite higher interest rates—perhaps too strong for the inflation fighters at the Federal Reserve.
The Federal Reserve signaled one more hike was possible this year, as central bankers shift their focus toward how long they’ll keep rates high and when they’ll decide there has been enough progress on their inflation fight.
