Powell Says Fed Has Time to Assess Data Before Deciding to Cut

-- Fed eral Reserve Chair Jerome Powell signaled policymakers will wait for clearer signs of lower inflation before cutting interest rates, even though a recent bump in prices didn’t alter their broader trajectory.Powell said recent inflation figures — though higher than expected — did not “materially change” the overall picture. He reiterated his expectation that it will likely be appropriate to begin lowering rates “at some point this year.

“Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy,” Powell said in the opening remarks ahead of a fireside chat. “If the economy evolves broadly as we expect, most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year.”Powell’s prepared remarks reinforce those he’s made following the March meeting.

Fed officials in March were split on how aggressive rate cuts will be this year. The central bank’s “dot plot” showed 10 officials forecast three or more quarter-point cuts this year, while nine anticipated two or fewer. “There may be more supply-side gains to be had,” he said. “Surveys of businesses still show difficulties in hiring people, difficulties in getting the inputs they need for their businesses — so, there’s some more benefit there.”

The February Job Openings and Labor Turnover Survey data released Tuesday revealed a hotter-than-expected number of job openings. BMO Capital Markets Senior Economist Jessica Lee joins Yahoo Finance Live to discuss what this print may mean for potential Federal Reserve rate cuts. Lee notes that the Federal Reserve's decision extends beyond just the one report, but "all of the data in its totality.

Source: Loan Digest (loandigest.net)

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