2024-04-25 04:08:33
The latest U.S. economic data shows little progress this year toward its 2% inflation target, so more time is needed before the Federal Reserve can cut interest rates.
As Day.Az reports with reference to Interfax, its head Jerome Powell stated this.
“We have said that we need more confidence that inflation will move sustainably towards the 2% target before it is time to ease monetary policy,” he said. “Recent data clearly has not given us confidence.”
“Instead, they indicate that achieving this confidence will likely take longer than expected,” the Fed chairman added.
Analysts now do not expect a reduction in the key interest rate in the United States before September, and some economists warn that the Federal Reserve may completely abandon plans to quickly ease monetary policy, writes MarketWatch.
Powell noted that the rate of growth in consumer prices “slowed quite a bit in the second half of last year.” But he said data released last week showed annual inflation was 2.8% in March, virtually unchanged from February.
If high inflation continues, the Fed will maintain the current interest rate range of 5.25-5.5% per annum “for as long as necessary,” Powell said.
The Federal Reserve believes that the current level of rates is “restrictive,” meaning it puts downward pressure on demand, thereby helping to cool inflation. “Right now, it is appropriate to give contractionary policies more time to work,” Powell said. “Whatever happens, we remain committed to getting inflation back to 2% over time.”
The next Fed meeting will take place April 30 – May 1.
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