Fed Officials Still See Three Cuts This Year

livemint.com:

Federal Reserve officials didn’t significantly change their outlook for delivering interest rate cuts later this year despite solid growth and firmer-than-anticipated inflation in recent months. Most officials penciled in three rate cuts this year in new projections, the same as in December. The central bank held steady its benchmark federal-funds rate in a range between 5.25% and 5.5%, a 23-year high.

The economic projections released Wednesday were the subject of intense focus on Wall Street because investors crave more information about how inflation readings for January and February influenced the Fed’s outlook. Stronger price pressures this year interrupted a streak of cooler reports in the second half of last year, raising questions over whether inflation will return to the Fed’s 2% target as quickly as officials and investors have anticipated. Ahead of the release of those projections and the Fed’s policy statement, investors anticipated the Fed would cut rates three times this year, with better than even odds that the first move would occur by June.

The Fed meets one more time before that, on April 30-May 1. Fed Chair Jerome Powell is set to answer questions at a press conference at 2:30 p.m. Eastern time.

He has suggested over the last few months that the central bank expects inflation to continue declining but that there may be bumps along the way. Powell told lawmakers two weeks ago that he thought officials were “not far" from having the confidence needed to reduce rates, which could allay concerns that the Fed will unnecessarily weaken the economy. But he also said it was important to confirm that recent progress on inflation wasn’t a fluke.