Powell says the Fed is ‘not far’ from the point of cutting interest rates

Federal
Reserve
Chair
Jerome
Powell
on
Thursday
indicated
that
interest
rate
cuts
may
not
be
too
far
off
if
inflation
signals
cooperate.

In
remarks
to
the
Senate
Banking
Committee,
the
central
bank
leader
didn’t
provide
a
precise
timetable
of
when
he
sees
easing
happening,
but
noted
that
the
day
could
be
coming
soon.

“We’re
waiting
to
become
more
confident
that
inflation
is
moving
sustainably
at
2%.
When
we
do
get
that
confidence,
and
we’re
not
far
from
it,
it’ll
be
appropriate
to
begin
to
dial
back
the
level
of
restriction,”
Powell
said
in
response
to
a
question
about
rates
and
inflation.
He
said
the
cuts
would
be
so
the
Fed
doesn’t
“drive
the
economy
into
recession
rather
than
normalizing
policy
as
the
economy
gets
back
to
normal.”

Powell
spoke
at
a
time
when
financial
markets
have
swung
considerably
in
their
expectations
on
Fed
policy.

At
the
beginning
of
the
year,
futures
traders
were
betting
the
Fed
would
start
in
March
and
keep
going
until
it
had
cut
six
or
seven
times
this
year.
The
outlook
now
is
for
the
first
cut
to
come
in
June,
with
four
reductions
totaling
a
full
percentage
point
by
the
end
of
2024.

Inflation
data
recently
has
indicated
the
pace
of
price
increases
is
continuing
to
slow,
though
the
consumer
price
index
rattled
markets
when
it
came
in
higher
than
expected
for
January.
Still,
Powell
noted

in
congressional
testimony
this
week
that
inflation
is
progressing
lower,
though
not
at
the
point
yet
where
the
Fed
is
ready
to
cut.

“I
think
we’re
in
the
right
place,”
Powell
said
of
the
current
policy
stance.