The Fed, under the leadership of Jerome Powell, has stated that it will not be cutting interest rates until inflation slows down to 2%. Powell reassured the public that there will be no increase in the Fed’s policy rate in future meetings and that a rate hike is unlikely to be the next move.
At its recent meeting, the Fed decided to maintain its key interest rate in the range of 5.25–5.50%, citing a lack of progress towards the inflation target as the reason for the decision. The central bank remains cautious about the economic outlook and inflation risks, emphasizing the need to achieve the long-term goal of 2% inflation.
According to Powell, developing the necessary confidence in inflation slowing down to the 2% target will take longer than expected. In March, consumer prices in the United States rose by 3.5% year-on-year, surpassing the desired 2% level. However, despite this setback, Powell remains optimistic that with continued efforts and monitoring of economic conditions, inflation can eventually be brought under control and meet their target of 2%.