- ORIGINAL NEWS
Powell reinforces position that the Fed is not ready to start cutting interest rates
- SUMMARY
The Federal Reserve Chair, Jerome Powell, has emphasized that the Fed will not rush to cut interest rates despite recent progress in combating inflation.
Inflation remains elevated, and lowering rates too soon risks undermining the battle against it.
However, the Fed expects to start reducing interest rates this year, although the exact timing is uncertain.
The Fed’s cautious approach is aimed at balancing the need to keep inflation under control while supporting economic growth.
Despite signs of economic improvement, the Fed is aware of the risks associated with pausing the tightening cycle prematurely.
Powell is scheduled to address Capitol Hill committees to discuss the Fed’s policy stance.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“Those remarks were taken verbatim from the Federal Open Market Committee’s statement following its most recent meeting, which concluded Jan. 31.”
“Longer-term inflation expectations appear to have remained well anchored, as reflected by a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets.”
Negative
“Markets had been widely expecting the Fed to ease up aggressively following 11 interest rate hikes totaling 5.25 percentage points that spanned March 2022 to July 2023.”
“In total, the speech broke no new ground on monetary policy or the Fed’s economic outlook.”