Inflation is slowing steadily, but it’s too early to declare victory or to discuss when the Federal Reserve might cut interest rates, Chair Jerome Powell said
WASHINGTON — Inflation is slowing steadily, but it’s too early to declare victory or to discuss when the Federal Reserve might cut interest rates, Chair Jerome Powell said Friday.
Speaking at Spelman College in Atlanta, Powell noted that consumer prices, excluding volatile food and energy costs, rose at just a 2.5% annual rate in the past six months. That's not far above the Fed's 2% inflation target.
Still, more progress is needed, Powell said. He added, «It would be premature to conclude with confidence» that the Fed has raised its benchmark interest rate high enough to fully defeat inflation.
Nor is it time to “speculate on when policy might ease," Powell said, referring to the possibility of cuts in the Fed's benchmark interest rate, which affects many consumer and business loans.
Instead, he said, the Fed's interest-rate-setting committee “is moving forward carefully” — phrasing that analysts consider a signal that the central bank doesn't plan any changes to interest rates anytime soon.
Many Wall Street investors have recently stepped up their bets that the Fed will cut rates as early as May, according to CME Fedwatch, in part after another Fed official earlier this week appeared to open the door to rate cuts by this spring.
Still, the Fed's policymakers are expected to leave interest rates alone when they next meet Dec. 12-13. It would be the third straight meeting in which they have kept rates at their current level. Beginning in March 2022, the Fed raised its key rate 11 times from near zero — to about 5.4%, the highest level in 22 years.
Those rate
Read more on abcnews.go.com