Will interest rates be lowered?
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| Effect of reducing the interest rate on the dollar |
Federal Reserve Chairman Jerome Powell's statements on Friday caused a decline in market expectations regarding future interest rate cuts, describing it as too early to declare victory over inflation.
Despite a series of recent positive indicators regarding prices, the Fed Chairman said that he and his team plan to “keep monetary policy tight” until they are convinced that inflation is firmly heading towards the 2% target.
“It would be too early to conclude with confidence that we have achieved a sufficiently restrictive stance, or to predict when we will cut rates,” Powell said in prepared remarks in Atlanta. “We are prepared to tighten monetary policy further if necessary.”
Powell also stated: “After the Federal Open Market Committee has made great strides in combating inflation, it is moving forward cautiously”.
He added: "Inflation is still well above target, but it is moving in the right direction, so he saw that the right thing to do now is to move carefully, think carefully about how things will go, and let the data tell us what's next."
He commented: “The data will tell us whether we have done enough or whether we need to do more”.