Chair Jay Powell says central bank ‘getting closer to the point’ of possible rate cut – ‘but we’re not quite there yet’
The US Federal Reserve announced on Wednesday it will hold interest rates steady, though officials hinted at optimism that rates could be cut later this year.
Interest rates are set by the Fed’s federal open market committee (FOMC), which meets eight times a year and will next meet in September.
The Fed was largely expected to keep interest rates steady this meeting, but investors are looking closely for hints that rate cuts could come as early as the Fed’s next meeting.
In a Wednesday press conference, Fed chair Jerome Powell expressed a tone of cautious optimism. He said “we’re getting closer to the point” where the Fed could lower interest rates, “but we’re not quite at that point yet”.
Powell said if inflation moves down quickly or in line with expectation, “a rate cut could be on the table at the September meeting”.
But, he said: “If inflation were to prove stickier, and we were seeing higher rates of inflation and disappointed readings, we would weigh that along with other things.”
He said that the “last couple of readings have added to confidence” that inflation is moving down towards the Fed’s target of 2%.
