Fed Chief Jerome Powell says a March rate cut is not likely

Federal
Reserve
Chair
Jerome
Powell
holds
a
press
conference
following
the
release
of
the
Fed’s
interest
rate
policy
decision
at
the
Federal
Reserve
in
Washington,
U.S.,
January
31,
2024.

Evelyn
Hockstein
|
Reuters

Fed
Chairman
Jerome
Powell
said
Wednesday
that
the
central
bank
would
likely
not
be
comfortable
enough
with
the
path
of
inflation
by
its
next
meeting
in
March
to
cut
interest
rates.

“Based
on
the
meeting
today,
I
would
tell
you
that
I
don’t
think
it’s
likely
that
the
committee
will
reach
a
level
of
confidence
by
the
time
of
the
March
meeting
to
identify
March
as
the
time
to
do
that.
But
that’s
to
be
seen,”

Powell
said.

The
statement
came
in
a
news
conference
after
the
Fed’s
January
meeting,
where
the
central
bank
left
its
benchmark
interest
rate

unchanged.
Powell
did
say
earlier
in
the

news
conference
that
rate
cuts
would
likely
begin
at
some
point
this
year.

Stocks
fell
to
their
session
lows
as
the
Fed
chief
dashed
hopes
of
traders
who
want
the
central
bank
to
slash
rates
sooner,
before
there’s
a
recession.
The
Dow
Jones
Industrial
Average
lost
300
points
at
one
point.

The
Fed’s
policy

statement
released
earlier
Wednesday
included
several
tweaks
that
suggested
the
central
bank
was
taking
further
rate
hikes
off
the
table
but
not
yet
ready
to
cut.
Powell’s
comments
appeared
to
clarify
for
traders
that
the
stance
would
continue
for
at
least
one
more
meeting.

“The
Fed
was
badly
burned
in
late
2021
and
2022
when
they
thought
high
inflation
would
be
transitory,
then
got
caught
by
surprise
when
it
was
higher
and
more
persistent
than
expected.
They
want
to
avoid
making
the
same
mistake
twice,”
Comerica
Bank’s
chief
economist,
Bill
Adams,
said
in
a
note
Wednesday
afternoon.

“The
Fed
will
wait
to
pull
the
trigger
on
rate
cuts
until
they
see
the
whites
of
2%
inflation’s
eyes,”
Adams
added.

Powell
also
declined
to
commit
to
a
series
of
rate
cuts
once
the
Fed
makes
its
first
move,
saying
that
it
“would
depend
on
the
data.”

The
central
bank’s
next
two
policy
decision
dates
are
scheduled
for
March
20
and
May
1.
In
recent
months,
traders
and
Wall
Street
strategists
have
focused
on
those
two
meetings
as
likely
candidates
for
the
first
rate
cut,
as
inflation
continues
to
fall
and
job
growth
slows.

The
Fed’s
preferred
inflation
gauge,
the
personal
consumption
expenditures
price
index,
is
updated
near
the
end
of
each
month.
There
will
likely
be
only
one
more
PCE
reading
before
the
Fed’s
March
meeting,
but
three
more
before
May.