In March, consumer prices in the United States rose by 3.5% year-on-year, surpassing the desired 2% level. This has led to concerns about inflation and its impact on the economy. The Federal Reserve (Fed), led by Jerome Powell, has stated that it will not be cutting interest rates until inflation slows down to 2%.
At its recent meeting, the Fed decided to maintain its key interest rate in the range of 5.25–5.50%, citing a lack of progress towards the inflation target as the reason for the decision. Powell assured the public that there will be no increase in the Fed’s policy rate in future meetings and that a rate hike is unlikely to be the next move.
Developing the necessary confidence in inflation slowing down to the 2% target will take longer than expected, according to Powell. He emphasized that achieving this goal is essential for stability and economic growth in the United States. The central bank remains cautious about the economic outlook and inflation risks, highlighting this as a major challenge for policymakers moving forward.
Overall, it appears that cutting interest rates may not be an option for some time until there is a significant slowdown in inflation and confidence is established that it will remain below 2%. The Fed is committed to achieving long-term goals and maintaining stability in the economy through careful monitoring of inflation risks and other factors affecting growth prospects.