Powell Says Fed Doesn't Need To Be In A Hurry To Lower Rates
15 November 2024 - 2:22AM
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Following the Federal Reserve's decision to lower interest rates
by a quarter point last week, Fed Chair Jerome Powell said in
remarks on Thursday that the central bank does not "need to be in a
hurry to lower rates" due to the strength of the economy.
"The economy is not sending any signals that we need to be in a
hurry to lower rates," Powell said during an event in Dallas,
Texas. "The strength we are currently seeing in the economy gives
us the ability to approach our decisions carefully."
Powell's comments on the outlook for rates came as he described
the U.S. economy's performance as "remarkably good," noting the
labor market remains in solid condition but is no longer a source
of significant inflationary pressures.
The Fed chief noted the labor market cooling and the substantial
improvement in broader supply conditions have brought inflation
down toward the central bank's target of 2 percent over the longer
run.
Powell noted the progress toward the inflation target allowed
the Fed to lower rates by 25 basis points last week after cutting
rates by 50 basis points in September.
"We are confident that with an appropriate recalibration of our
policy stance, strength in the economy and the labor market can be
maintained, with inflation moving sustainably down to 2 percent,"
he said.
Powell said the Fed is attentive to risks to both its employment
and inflation goals, noting cutting rates too quickly could hinder
progress on inflation but cutting rates too slowly could unduly
weaken economic activity and employment.
"We are moving policy over time to a more neutral setting. But
the path for getting there is not preset," Powell said.
"Ultimately, the path of the policy rate will depend on how the
incoming data and the economic outlook evolve."
The Fed's next monetary policy meeting is scheduled for December
17-18, with CME Group's FedWatch Tool currently indicating a 67.3
percent chance the central bank lowers rates by another quarter
point.
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