Federal Reserve Chair Jerome Powell stated on Friday that he is not in a rush to reduce interest rates. “We don’t need to be in a hurry to cut,” Powell said during an event.
Recent inflation data, which was released earlier, is “pretty much in line with our expectations,” he noted. However, Powell emphasized that interest rates will not be lowered until officials are confident that inflation is moving towards their 2% target.
“It’s encouraging to see data aligning with expectations,” he mentioned, pointing out that the latest figures do not match up to what policymakers observed last year.
Government data released on Friday revealed that the Fed’s preferred measure of underlying inflation decreased last month following a larger increase in January. The core personal consumption expenditures price index, excluding volatile food and energy costs, rose by 0.3% in February after a 0.5% increase in the previous month, marking its largest consecutive rise in a year.
Powell stated that officials anticipate inflation to continue declining in a “sometimes bumpy path,” echoing comments made after the Fed’s recent policy meeting earlier this month.
During that meeting, Fed officials maintained short-term interest rates at a more than two-decade high, with a slight majority forecasting three rate cuts for 2024.
Although Powell indicated that it might be appropriate to adjust policy “at some point this year,” he and other policymakers emphasized that they are not in a rush given the strong state of the economy and signs of ongoing price pressures.
Despite high interest rates, the US economy has shown resilience. In February, inflation-adjusted consumer spending surpassed all economists’ projections, and employers continued to hire workers at a strong pace. Data released earlier this week indicated that economic growth in the fourth quarter was stronger than initially estimated.
