Fed's Powell says inflation data this year shows a 'lack of progress'
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Federal Reserve Chair Jerome Powell on Tuesday said it is likely that inflation will take «longer than expected» to reach the central bank's 2% target, casting fresh doubt on when policymakers may cut interest rates this year.
Powell cited the string of inflation reports during the first three months of the year that showed progress had largely stalled on inflation.
«More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal,» the Fed chief said during a panel discussion.
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Federal Reserve Chair Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on March 22, 2023. (Photographer: Al Drago/Bloomberg via Getty Images / Getty Images)
Policymakers have raised interest rates sharply over the past two years, approving 11 rate increases in the hopes of crushing inflation and cooling the economy. In the span of just 16 months, interest rates surged from near zero to above 5%, the fastest pace of tightening since the 1980s. Fed officials are now grappling with when they should take their foot off the brake.
Powell said Tuesday that policymakers will «maintain the current level of restriction for as long as needed» until price pressures are tamed.
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«The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to
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