Fed’s Powell says officials won’t wait until inflation reaches 2% to cut rates

Federal Reserve Chair Jerome Powell said Monday that policymakers will not wait until inflation falls to 2% in order to cut interest rates.

“The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said at the Economic Club of Washington D.C.

The Fed chief reiterated that policymakers are looking for additional evidence that high inflation is conquered before they pivot to reducing rates.

“We want to have greater confidence that inflation is moving sustainably down toward our 2% target,” he said. “What increases that is more good inflation data. And lately, we have been getting some of that.”

 

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