Powell Cautious on Rate Cuts, Sees Longer Path to Inflation Target

Federal Reserve Chair Jerome Powell recently stated that the conditions necessary for reducing interest rates are unlikely to materialize soon, given the current economic data. Despite a significant decline in inflation in the latter half of last year, recent figures have not convincingly demonstrated progress toward the Fed’s 2% inflation target. Powell emphasized the need for more substantial evidence of sustained inflation reduction before considering rate cuts. Financial markets, which had initially anticipated rate reductions as early as June, are now adjusting their expectations toward September, as reflected in the latest projections from the CME FedWatch tool.