Interest rate cut not on table; no decision on Dec meeting: Fed Chairman

01/11/2023 Argaam

Jerome Powell, Chairman of US Federal Reserve


The US Federal Reserve is not declaring victory on inflation even though recent readings have fallen below 4%, Chairman Jerome Powell said in a press conference following the decision to hold rates steady.

 

“A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal. The process of getting inflation sustainably down to 2% has a long way to go,” Powell said.

 

He noted that policymakers do not expect an economic recession and interest rate cuts are not on the table for now. “I am not yet confident that interest rates are high enough to reduce inflation,” he added.

 

The Fed Chairman stressed that policymakers have not yet reached a decision on how to proceed at their next meeting in December, adding that the central bank is "moving cautiously."

 

He said that more data is needed to ensure that the recent decline in inflation is sustainable. The Fed is paying attention to the recent strong economic data, which, at some point, may require further interest rate hikes.

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