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Powell: Fed’s Inflation Goal “Likely to Take Longer Than Expected”
The most recent data show a lack of progress this year on reaching the Federal Reserve’s inflation goal of 2%, MarketWatch reported Tuesday. Accordingly, Fed Chair Jerome Powell said more time is needed before the central bank can lower interest rates.
“The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said during an event sponsored by the Wilson Center. He has never pointed to a specific meeting of the Federal Open Market Committee at which rate cuts might start, reported MarketWatch.
Although financial markets had widely expected the first move to come in June, the first cut is now projected for September, according to the CME FedWatch tool.
In his remarks, Powell noted that inflation has “declined quite significantly over the second half of last year.” However, thus far in 2024 there has been little change, and the 12-month annual inflation rate is expected to rise at a 2.8% annualized rate in March, said Powell.
The Fed chair said if higher inflation persists, the Fed can maintain the current level of interest rates, in a range of 5.25%-5.5%, “for as long as needed.”
- ◦Economy
- ◦Policy/Gov't
