The president of the Federal Reserve (Fed)Jerome Powell reiterated this Friday that they are in no hurry to cut the interest rate this year, during an event in California (USA) Powell assured that such action will not be taken until he sees “better inflation readings” and is more confident that annual price increases are falling toward his 2% target, according to Bloomberg.
“We don’t need to be in a hurry to cut,” he said during a conference at the Federal Reserve Bank of San Francisco (California). However, he stressed that the new inflation data released earlier (today) leans towards his expectations.
The personal consumption expenditure (PCE) price index, one of the key data that guides the monetary policy of the Fedand published today, registered an increase of 0.3% between January and February, after 0.5 in recent months.
“It’s good to see something conforming to expectations,” he said, adding that the latest readings are not as good as what policymakers saw last year. Powell said inflation is expected to continue falling, although it is sometimes a “bumpy road,” Bloomberg further noted.
The Fed has kept rates unchanged since its July 2023 meeting, in the range of 5.25% to 5.5%, its highest level since 2001.
The president of the Fedalways careful with his comments, said earlier this month that the body he heads will decide “with care and consideration” when interest rates are lowered.
That decision will be made “sometime this year” when it is certain that inflation is being reduced in a sustained manner.
Source: Gestion
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