Powell: Rate cuts will take 'longer than previously expected'

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Federal Reserve Chair Jerome Powell confirmed Wednesday that the central bank is pushing back its plans for rate cuts as inflation plateaus well above the bank’s target.

The Federal Open Markets Committee (FOMC), the central bank committee tasked with setting monetary policy, voted Wednesday to keep the federal funds rate at a range of 5.25 percent to 5.5 percent, where it has been since July. The FOMC cited a “lack of further progress” toward hitting its inflation goal of 2 percent.

“It is likely that gaining such greater confidence will take longer than previously expected,” Powell told reporters.

While the Fed signaled at the end of last year it would start cutting rates in 2024, traders now expect the first rate cuts won’t come until at least November, according to the CME FedWatch Tool.

Powell said it was unlikely that the next policy move would be a rate hike, but noted the central bank is “committed to retain retaining our current restrictive stance of policy for as long as it’s appropriate, and we’ll do that.”


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