Fed Powell repeats March too soon for interest rate cut

In an interview on CBS’s 60 Minutes, Fed Chair Jerome Powell emphasized the importance of ensuring inflation is convincingly on a downward trajectory toward 2% target before the central bank cut interest rates. He candidly stated, “it’s not likely that this committee will reach that level of confidence in time for the March meeting,” echoing the comments he made last week at the post-FOMC press conference.

Highlighting the collective outlook of FOMC, Powell shared that the majority of its 19 participants anticipate a scenario where cutting federal funds rate would be appropriate within the year. However, he stressed that any such decision would “depend on the evolution of the economy.”

Powell also underscored a forward-looking perspective, stating, “we wouldn’t wait to get to 2% to cut rates,” and acknowledging that rate cuts are “actively being considered” despite current inflation rates hovering between 2-

Expectations for inflation’s trajectory were also addressed, with Powell predicting a decrease in the 12-month inflation figures throughout the year. He attributed this anticipated decline to the “unwinding” of “pandemic-related distortions” and the consequential impact of the Fed’s “tightening of policy.”

Full transcript of Fed Powell’s interview here.