Fed's Powell says confidence that inflation will slow is 'not as high' as before
Wells Fargo CIO for Wealth & Investment Management Darrell Cronk says the April labor data was exactly what the Fed wanted to see on 'Making Money.'
Federal Reserve Chair Jerome Powell reiterated Tuesday that the central bank will be patient and wait for evidence that inflation is slowing before it cuts interest rates.
Speaking during a panel discussion in Amsterdam, Powell said that recent inflation figures – which have come in higher than expected since the start of the year – suggest it will take longer than previously thought to attain the confidence needed to start loosening monetary policy.
«We did not expect this to be a smooth road, but these were higher than I think anybody expected,» he said. «What that has told us is that we will need to be patient and let restrictive policy do its work.»
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Federal Reserve Chair Jerome Powell holds a press conference at the end of the two-day Federal Open Market Committee meeting at the Federal Reserve in Washington, D.C. on March 20, 2024. (Photo by Mandel Ngan/ AFP via Getty Images / Getty Images)
While the Fed chief said that he expects inflation will eventually continue to cool further, he warned that «my confidence in that is not as high as it was, having seen these readings in the first three months of the year.»
Still, Powell said it remained unlikely that the Fed would need to hike rates any further, even as the outlook for rate cuts dims.
«I don't think that it is likely based on the data we have that the next move that we make will be a rate hike,» he said. «It is more likely… we hold the policy rate where it is.»
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