Jerome Powell has two more opportunities to adjust interest rates before his term as Federal Reserve chair ends — and he may not need them.
Federal Reserve officials left interest rates unchanged and pointed to improvements in the US economy as they signaled a more cautious approach to potential future adjustments.
Federal Reserve officials are poised to cut interest rates again next week, but any benefit to the economy is likely to take much longer to show up than normal and may be blunted by factors that monetary policy can’t control.
The Federal Reserve’s annual gathering in the Rocky Mountains is usually a time for central bankers and their wonky friends to kick back, discuss a few complicated economic topics and then go for a hike in the shadow of Grand Teton.
It’s a widely held belief among economists that President Donald Trump’s tariffs will boost inflation notably over the next few months. But muted price increases so far have called that assumption into question, emboldening the White House and opening up divisions at the Federal Reserve.
Federal Reserve Vice Chair for Supervision Michelle Bowman warned the current approach to leverage ratio requirements has led to unintended consequences in the market while adding she could support lowering interest rates as soon as July.
Federal Reserve Chair Jerome Powell said policymakers are weighing changes to key parts of the framework that guides their monetary policy decisions, including how they think about shortfalls in US employment and approach their inflation target.
Federal Reserve officials are prepared to hold their policy rate steady to minimize the risk that President Donald Trump’s tariffs trigger a persistent rise in inflation, even if the labor market softens further.
Federal Reserve Governor Michelle Bowman said the neutral level for the central bank’s policy rate had likely risen since the Covid-19 pandemic.
Federal Reserve Governor Lisa Cook said policymakers can proceed more cautiously with additional rate cuts, citing a sturdy labor market and recent bumpiness in inflation data.
Federal Reserve Chair Jerome Powell downplayed the prospects of tension with the incoming Trump administration and said he expects officials can move cautiously as they continue lowering interest rates.
Chair Jerome Powell said the time has come for the Federal Reserve to cut its key policy rate, affirming expectations that officials will begin lowering borrowing costs next month and making clear his intention to prevent further cooling in the labor market.
Chair Jerome Powell will usher in the next chapter in the Federal Reserve’s inflation battle on Friday, when he’s expected to set the table for an interest-rate cut while reassuring investors that policymakers can stave off a sharp economic slowdown.
For more than two years, inflation has eclipsed everything else at the Federal Reserve. In a shift eagerly awaited by global markets, that’s poised to change.
Jerome Powell will face pressure this week from lawmakers growing impatient for the Federal Reserve to cut interest rates and others who are unhappy with its latest plan to boost capital requirements for Wall Street lenders.
Federal Reserve Governor Christopher Waller said he needs to see “several more” months of good inflation figures to begin interest-rate cuts, though recent data suggest progress has likely resumed.
