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Fed members back cutting rates this year, but need confidence inflation slowing

Published 04/03/2024, 12:51 PM
Updated 04/03/2024, 01:05 PM
© Reuters

Investing.com -- Federal Reserve chairman Jerome Powell said Wednesday most voting Fed participants support lowering interest rates at some point this year, but not until the central bank has greater confidence from incoming data that inflation is on a sustainable move lower. 

"If the economy evolves broadly as we expect, most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year," Powell said in opening remarks ahead of a question-and-answer session at Stanford University.

But a pivot to cuts isn't expected to arrive until "we have greater confidence that inflation is moving sustainably down toward 2 percent," the fed chief said, adding that the Fed has the luxury of waiting because of the strength in the economy and progress on inflation.  

The recent data showing that the economy remains solid and inflation surprised to the upside since the turn of the year, muddying the outlook on rate cuts forcing investors to rein in expectations of rate cuts. 

But Powell said that the recent data haven't materially changed the Fed's outlook, which continues "to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path."

Powell continued to flag the risk for the future monetary policy decision remain two-sided risks -- cutting rates too early, risks undoing the progress on inflation, but keeping rates higher for longer could unduly "weaken economic activity and employment."    

Treasury yields dipped following the remarks, dragging the US Dollar Index Futures lower. 

Latest comments

need more interest rates increase
"a strong but rebalancing labor market", !means a shift to lower wages because of the open border policy letting in cheap labor.
no se como pretenden desacelerar la inflacion , powell de lo unico que ha hablado es de los recortes de tasas , pero cada vez que powell habla , la inflacion se acelera y por otro lado el gasto del estado es muy elevado, si hacemos una comparacion entre economia publica y economia privada , la economia privada es quien esta sosteniendo a estados unidos y cada vez que powell habla pareciera querer dañar la inversion privada , entonces no se corrsponde el desaceleramiento de la inflacion que ellos pretenden , no hacen balanza del daño que ellos mismos provocan en la economia interna y los recortes de tipos planean hacer 3 recortes este año , la pregunta es , si eso es lo mas conveniente para una estabilidad economica o simplemente es mas de lo mismo para acelerar la inflacion
If the economy evolves broadly there's no need of cutting anything.
Thanks Trump and Biden for doubling the nation’s money supply dumb and dumber
u fool man powell your speech was very bad no clear spech and the market was react very bad
inflation is just an excuse, real target is wants China crash
China crashes because the CCP prioritizes it's own power over the good of the Chinese plebs, over anything else. Retrumplicans are similar.
Core PCE is always controllable, there will be no inflations in US anymore, at least from the reports
Higher. For. Longer. Let it sink in.
The US should drive energy prices 50% lower. That would lower inflation.
January with the new president
Trump, if elected, will be a Constitution-terminating dictator. Retrumplicans have already said they'll take away women's suffrage and execute non-Christians.
... retrumplicans like Nick Fuentes.
2% inflation with the insane debt that we have! Good luck.
Bidenflation is killing Americans.
No, its not due to price gauging. Its due to Joe Biden war on oil with his import of 10 million illegals along with the constant spending by the Biden administration. Biden is doing it on purpose.
The average profit margin at a grocery store is 2-3%. Proctor and Gamble maybe the largest supplier to grocery stores net margin has been roughly the same 17-19% for the last 5 years. There probably is some price gouging on very specialty items, I can't say for sure. However, by in large the increases have been due to inflation. The mere fact that companies are charging more and maintaining unit growth is going to create greater profits.
10% margin on $1 is .10, 10% margin on $10 is $1. high inflation, same margin is more profit. Bidenflation is the problem, not gouging
Cocoa - ATH Coffee - near ATH Gold - ATH Real estate - ATH Food up 25% Insurance up 25% Rents are up Electricity up Oil at $85 a barrel and they talking about lowering rates 🤣
how inflation can go down when monetary mass increase more than output? please explain
Follow the trend and technicals, not fundamentals. Mkt does whatbit wants to do, not what it is supposed to do
US money supply has been trending down since early 2022.
@Kelly: Market is supposed to do what it wants to do. ;-)
Ah yes, the laughingstock of the investing world miraculously bounces off the trampoline of FRAUD to stay green. Just who are these savvy investors that rush in at the break even point every time this criminally manipulated JOKE of a market attempts to go red?
Institutions have been selling into the rally.
IT'S A CONSPIRACY!!!
These investors have been savvy; they's been profitable being bullish. ;-)
Of course, Biden, sponsored by the communist Soros, must be re-elected And why cut interest if the economy is so good, low unemployment, falling inflation, happy media....why spoil the holiday
Why settle for good economy when it can be better? Why settle for retrumplican chaos, frauds, incompetence and dysfunction when Biden is running?
How many times the Fed got it wrong in past? Yeah. Keep pumping this reflation/stagflation market, wall st will thank you dearly.
Neither the Fed nor the bulls nor anyone else claims the Fed was never wrong.
more GARBAGE from the LEFT
Bidenflation is making Americans poor and killing the middle class.
typical radical emotional trumper
@simon: Powell is a Republican made Chair by a loser retrumplican. @tom: US inflation has been lower than that of its peer economies.
How? only way to keep inflation low without raising rates is increasing tax, but then no thanks. I'd rather prefer rate hikes. This market is insanely bubbled.
let it crash!!!
Another way is to help Ukraine defeat the invasion and get Russian murderers back in Russia and Russian commodities back out in the free market.
There ain't no way in hell that they are cutting rates this year. inflation is still trending up as little as it may be. it's still trending up. why in the hell would they cut rates?? unless it's for political reasons
They won't but for the sake of markets they have to fabricate and deceive. Part of the game
Fed can cut rate and still have interest rate greater than inflation rate. Maybe the Fed will cut rate because Trump threatened to fired them if they don't. There's your political reasons.
I have to disagree, it's not for the markets, it's to lower the borrowing cost for drunk Uncle Sam. The debt adds $1 trillion every 2.5 months, the fed will lower rates just because of that. Not markets at ATH.
USD rates will rise...GOLD better be CAREFULL
dont care if those are lies or not, remember to pump the market. economics is a joke, comparing to the market.
Desperate to keep the rate hope cuts alive...and they should be. Stocks soared almost 10K on rate cut hopes since Nov 2023. Can't have that reversing now can we? Think of all the boomers 401Ks that are at stake. More FED liquidity incoming IMO
June is off the table pretty much at this point. commodity prices are jumping so tough to believe that will not prop inflation.
Every week different opinion🤣 Better go work for McDonald's, Jerome!🤣
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