“Jerome Powell” is signaling that the Fed is ready to cut interest rates in 2024, insisting that the cuts will be too soon. Risk of losing the war against inflation. And interest rates may have to rise again
On March 6, 2024, CNBC news agency reported that Jerome Powell, Chairman of the Federal Reserve (Fed). He is scheduled to address Congress on March 6, 2024, and expects to begin cutting interest rates in 2024, but is not yet ready to say when.
In a statement to the House Financial Services Committee on March 6, Jerome Powell said the Fed is focusing on risks from inflation. And don't want interest rates to drop too quickly
“The central bank will evaluate various inputs while considering adjusting the policy interest rate target range. including changing trends and carefully balancing risks,” the central bank chief said. Adding that “The Committee considers it inappropriate to lower the interest rate target range. Until there is confidence that inflation is settling down to a steady 2%.
Overall, the report does not break new ground in terms of the central bank's monetary policy or economic outlook. The comments, however, indicate that the central bank remains concerned about inflation. And as opposed to making decisions based on incoming information, it is a predetermined guideline.
“We believe policy rates will peak during this tightening cycle. If the economy grows broadly as expected it will begin to ease policy constraints at some point this year. But the economic outlook remains uncertain and continued progress towards the 2% inflation target is not guaranteed,” the central bank said. The leader said.
In addition, the central bank governor reiterated Cutting interest rates too quickly could put the central bank at risk of losing the war on inflation. And the policy interest rate may have to be hiked again. Meanwhile, waiting too long could harm economic growth.
The market is very optimistic that the central bank will be more accommodative. This comes after 11 interest rate hikes totaling 5.25% between March 2022 and July 2023.
However, those expectations have changed in recent weeks following several cautionary statements from the central bank. The January meeting helped confirm the Fed's cautious approach. The report clearly stated that the interest rate cut is yet to happen. Although the market is trending,
Despite opposition to interest rate cuts, the central bank's chief noted the central bank's moves to meet its 2% inflation target without harming the labor market and the broader economy.
“The economy has made great progress on these objectives over the past year,” said Jerome Powell, noting that inflation has slowed significantly. Because the risks to meeting the employment and inflation targets are better balanced.
The central bank's inflation rate currently stands at 2.4% per annum, excluding food and energy, at 2.8%. The figures reflect a significant slowdown from 2022.
But the central bank chief will face many questions during his two-day address to Congress, which concludes with an appearance before the House Financial Services Committee on March 6. Senate Banking Committee on March 7
Although the central bank tries to stay out of politics, presidential election years are especially challenging. By former Republican nominee Donald Trump. He was a strong critic of the Central Bank while in office. Sen. of Massachusetts. Some House Democrats, led by Elizabeth Warren, call on the Fed to cut interest rates. This is because of the pressure that low-income families create to make ends meet.
Read related news:
“Avid gamer. Social media geek. Proud troublemaker. Thinker. Travel fan. Problem solver.”