The Press Stories
Federal Reserve Chair Jerome Powell has stated that the Fed may not cut interest rates in June if the economy is not fully prepared. Powell emphasized the importance of strong employment data, which is giving the central bank more time to wait for inflation to reach the target of 2%.
The Personal Consumption Expenditures price index recently rose to 2.5% on an annual basis, surpassing the Fed’s desired 2% target. Powell expressed concerns about cutting rates too early, as it could potentially lead to disruptive inflation down the line. There are fears that delaying rate cuts could trigger a recession if interest rates remain high.
Several Fed officials, including Atlanta Fed President Raphael Bostic, share Powell’s concerns about cutting rates prematurely. Powell also stated that he does not anticipate interest rates returning to pre-pandemic levels in the near future.
With Powell’s term at the Fed set to expire in two years, there is uncertainty surrounding who will be in the Oval Office at that time. Powell hopes that the Fed will maintain its independence and remain free from political influence in order to effectively achieve its goals of price stability and maximum employment.
