Fed Chair Powell Explains Why Rate Cuts Aren’t Ready Yet: Fed Holds Rates Steady, Revises 2024 Outlook
The Federal Reserve has maintained interest rates within the current range of 5.25% to 5.5%, but has adjusted its outlook, projecting only one rate cut in 2024. Policymakers noted “modest further progress” toward the central bank’s 2% inflation target.
During a press conference, Federal Reserve Chair Jerome Powell emphasized that the central bank lacks the confidence to reduce rates at this time, even though inflation has eased from its peak levels. Powell stated that it’s still too early to determine if the current monetary policy is “sufficiently restrictive” to ensure long-term inflation control.
“The question of whether it’s sufficiently restrictive is going to be one we know over time,” Powell said. He pointed out that while the restrictive policy is showing the desired effects on inflation, sufficient progress is still necessary before any rate cuts can be considered.
Powell’s remarks underscore the cautious approach of the Fed as it waits for more concrete evidence that inflation is consistently moving towards the 2% target. The central bank’s decision to hold rates steady and revise its outlook highlights its commitment to stabilizing prices and achieving its inflation goals without premature adjustments to monetary policy.