Mikkel Rosenvold
11 weeks ago

Fed's Powell says no to lower interest rates for now

The Fed Chair, on why the Federal Reserve isn't ready to reduce interest rates just yet.
iPhone displaying the Fed's logo laying on top up a pile of US dollars.
Poetra.RH, Shutterstock

Jerome Powell, the head of the Federal Reserve, has made it clear that the Federal Reserve is not in a hurry to cut interest rates, writes CNBC.

He testified in congress yesterday, stressing that the Fed wants to be sure inflation is consistently moving towards their 2% goal before making such a move.

Powell pointed out that dropping rates too soon could make it harder to keep inflation under control. Even though he believes that interest rates might not go any higher in this cycle, any decision to ease up will be based on new data, given how uncertain the economy is right now.

Despite not moving towards rate cuts yet, Powell recognized the strides towards reducing inflation, with a significant slowdown in the rise of prices for both goods and services.

Although, Powell primarily reiterated sentiments from the press conference at the latest Federal Open Market Committee (FOMC) meeting, the stock market reacted favorably as he talked. There was a small drop in the cost of borrowing for the government, indicating investors felt reassured about a steady approach to managing the economy.

Meanwhile, however, gold hit a record peak, reports Reuters, arguing that the value of the metal frequently increases whenever interest rates are low.

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