Chair Jerome Powell noted that inflation has cooled considerably but it’s “still too high, ongoing progress in bringing it down is not assured and the path forward is uncertain.”
Updated: 37 minutes agoWASHINGTON — Federal Reserve officials signaled Wednesday that they still expect to cut their key interest rate three times in 2024 despite signs that inflation stayed surprisingly high at the start of the year. Yet they foresee fewer rate cuts in 2025, and they slightly raised their inflation forecasts.
“The risks are really two-sided here,” Powell said. “We’re in a situation where if we ease too much or too soon, we could see inflation come back. And if we ease too late, we could see unnecessary harm to employment.” As a whole, Wednesday’s forecasts suggest that the policymakers expect the U.S. economy to continue enjoying an unusual combination: A healthy job market and economy in tandem with inflation that continues to cool — just more gradually than they had predicted three months ago.
Two recent government reports pointed to higher-than-expected inflation. One showed that consumer prices jumped from January to February by much more than is consistent with the Fed’s target. The second showed that wholesale inflation came in surprisingly high — a possible sign of inflation pressures in the pipeline that could cause consumer price increases to remain elevated.
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