Powell says Fed won't rush to cut interest rates until inflation is conquered

foxbusiness.com:

Investors are watching for any clarity about the timing of interest-rate cuts this year.

Federal Reserve Chair Jerome Powell on Wednesday said policymakers are on track to cut interest rates sometime in 2024, but are not ready to do so until they are confident inflation is tamed.

«The committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,» he said in remarks prepared for testimony before the House Financial Services Committee.

The Fed chief is on Capitol Hill for the first of two days of his semi-annual monetary policy testimony. He is slated to appear before the Senate Banking Committee on Thursday.

FED HOLDS INTEREST RATES STEADY, SIGNALS IT IS NOT READY TO START REDUCING RATES

Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, D.C., on March 22, 2023. (Al Drago/Bloomberg via / Getty Images)

Powell's remarks come amid some concern on Wall Street that progress on inflation is stalling out. While inflation has fallen considerably from a peak of 9.1%, progress has largely flatlined since the summer. 

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 officials are trying to balance the risks between cutting interest rates too soon, which risks setting off inflation again, or waiting too long to cut rates, which could weigh on the economy and