Federal Reserve Chairman Jerome Powell holds a press conference after announcing the Fed’s interest rate policy decision at the Federal Reserve Board in Washington, U.S. on January 31, 2024.
Evelyn HochsteinReuter
Federal Reserve Chairman Jerome Powell vowed in an interview aired Sunday that the central bank would cut interest rates cautiously this year, perhaps at a much slower pace than markets expected.
In a wide-ranging interview with “60 Minutes” after the Federal Open Market Committee meeting last week, Powell expressed confidence in the economy, vowed not to be swayed by this year’s presidential election, and said the pain of the rate hikes he had feared would never come. Said it wouldn’t happen and it really did happen.
“I feel like when the economy is this strong, we can approach the question of when to start lowering rates in a measured manner,” he told The News’ Scott Pelley, according to a transcript released by CBS. he said.
“We would like to see further evidence of a sustained decline in inflation to 2%,” Powell added. “Our confidence is rising. We just need a little more confidence before we take the very important step of starting to cut rates.”
He said, as he did in a press conference Wednesday, that the FOMC is unlikely to take its first action in March, as futures markets had expected.
The committee concluded the meeting by keeping the benchmark borrowing rate in the range of 5.25-5.5%. In a statement after the meeting, the committee said it would not cut interest rates “until we have greater confidence that inflation is on track to reach its 2% target.”
The market is actively betting on how much the Fed will cut interest rates this year. Current pricing suggests a 5-quarter percentage point cut, but Powell stood by the FOMC’s “dot plot” grid of individual members’ forecasts for December, with just three moves.
“We will update [the outlook] At the March meeting. But I would like to say that nothing has happened during this time to make me think that people are going to dramatically change their expectations,” he said, noting that “the time” for cuts is “but probably not yet.” did.
Powell was generally optimistic about the economy, noting that while inflation remained above the Fed’s target, the job market was strong and inflation was slowing. Nonfarm payrolls rose by 353,000 in January, the Labor Department said Friday. He said the biggest risk is likely to come from geopolitical events.
At the Fed’s annual meeting in Jackson Hole, Wyoming, in August 2022, early in the rate hike cycle, Chairman Powell warned that policy tightening would cause “some pain.” But that wasn’t the case, he said in an interview on “60 Minutes.”
“That’s not really happening,” he said. “The economy continues to grow strongly. Job creation is high.” “So we haven’t had the pain that I and a lot of other people were worried about. And that’s a really good thing. And, you know, we’re hopeful that it will continue. I hope.”
In a separate matter, Powell reiterated that neither he nor his colleagues will be swayed by political pressure in this presidential election year.
“We don’t consider politics in our decisions. We never will. We never will,” he said.