“Monetary policy is thought to affect economic conditions with a lag, and the full effects of our tightening have likely not yet been felt,” Powell said. The Fed chair did highlight recent progress, noting that over the six months ending in October, core inflation, which excludes food and energy, ran at an annual rate of 2.5%, compared to the overall goal for 2% annual gains. Traders see more than a full point of cuts by December 2024.Ĭonversely, Fed officials projected rates at 5%-5.25% at the end of next year, according to their median forecast released in September - just one-quarter point lower than the current level. Markets took Powell’s brush-off in stride, boosting odds of a quarter-point cut by the Federal Open Market Committee’s March meeting well above 50%, and fully pricing in a cut in May. “Having come so far so quickly, the FOMC is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” Powell said at Spelman College, a historically Black school in Atlanta.

A slowing US economy and fall in the inflation rate have raised expectations among investors that the central bank could begin to cut rates as soon as March. 12-13, giving themselves more time to evaluate the economy after raising rates aggressively from near zero in March 2022 to above 5% in July. Powell signaled that Fed officials expect to leave interest rates steady when they meet Dec.

“We are prepared to tighten policy further if it becomes appropriate to do so.”

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” Powell said Friday in Atlanta. Federal Reserve Chair Jerome Powell pushed back against Wall Street’s growing expectations of interest-rate cuts in the first half of 2024, saying the committee will move cautiously with borrowing costs at a 22-year high but retain the option to hike further.

Cd rate at huntington bank