Following the ECB's decision to hold interest rates, President Christine Lagarde will hold a press conference. Despite leaving rates unchanged, the ECB has lowered its 2024 growth forecast to 0.6% (from 0.8%) and reduced its inflation projection to 2.3% (from 2.7%).
Federal Reserve Chairman Jerome Powell testified to the Senate Banking Committee, reiterating his anticipation for potential interest rate cuts contingent on future incoming data. Emphasizing that inflation must show signs of decelerating towards the Fed's target, Powell noted that current evidence is insufficient. He also addressed monetary policy and the proposed Basel III bank capital regulations, facing questions in his last public appearance before the Fed's upcoming meeting in mid-March.
Federal Reserve Chair Jerome Powell has hinted at the possibility of lowering interest rates in the near future if inflation continues to ease. The Fed is nearing confidence that inflation is approaching their 2% target, and will consider rate cuts to prevent an economic downturn. Market expectations indicate the first cut may occur in June, with a total of 4 cuts anticipated by the end of 2024. However, Powell emphasized that the current policy stance remains appropriate until stronger indications of inflation decline are observed.
Consumers increasingly doubt the Federal Reserve can achieve its inflation goals anytime soon, according to a survey. This is because longer-term inflation expectations have risen, with the three-year outlook increasing to 2.7% and the five-year outlook jumping to 2.9%. This is well ahead of the Fed's 2% goal for 12-month inflation, indicating that the central bank may need to keep policy tighter for longer.
