The Fed is in no rush to cut interest rates as officials are encouraged by recent inflation data that shows price pressures moderating toward the central bank’s 2% target, according to Nick Timiraos, a reporter for the Wall Street Journal who is often considered a “Fed spokesman.”
The U.S. economy remains strong, allowing policymakers to take a cautious approach when deciding when and whether to cut rates, Fed Chairman Jerome Powell told Congress today. The Fed previously cut interest rates by a full percentage point at its final three meetings in 2024, following a period of historically high rates.
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“Given that our policy stance is now much more accommodative than it has been in the past and the economy remains strong, there is no need to rush to adjust our policy stance,” Powell said in prepared remarks before the Senate Banking Committee.
Powell defended last year’s rate cuts, calling them a necessary adjustment to accommodate improving inflation trends and cooling labor market conditions. He said further rate cuts could be considered if the labor market weakens unexpectedly or inflation reaches the Fed’s 2% target earlier than expected.
*This is not investment advice.
Continue Reading: What Does FED Chairman Jerome Powell’s Speech Mean? Will Interest Rates Remain High?
