Federal Reserve Chair Jerome Powell cautioned that persistently elevated inflation will likely delay any Fed interest rate cuts until later this year.
WASHINGTON — Federal Reserve Chair Jerome Powell cautioned Tuesday that persistently elevated inflation will likelyuntil later this year, opening the door to a period of higher-for-longer rates.
“If higher inflation does persist," he said, “we can maintain the current level of for as long as needed.” “Powell’s comments make it clear the Fed is now looking past June,” when many economists had previously expected rate cuts to begin, Krishna Guha, an analyst at EvercoreISI, said in a research note.remains stubbornly above the Fed's 2% target
As recently as December, Wall Street traders had priced in as many as six quarter-point rate cuts this year. Now they foresee only two rate cuts, with the first coming in September., who also appeared to raise the prospect that the Fed would not carry out three cuts this year in its benchmark rate. The Fed's rate stands at a 23-year high of 5.3% after 11 rate hikes beginning two years ago.
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