Reserve

Jerome Powell

Chair

Capitol

Federal Reserve Chair Jerome Powell has revealed that he’s not ready to pull the trigger on cutting interest rates just yet. 
With inflation beginning to cool off and the labor market showing signs of easing, Powell and the Federal Reserve have been overwhelmed with closely watching all economic indicators. He said that:
<blockquote>
 “We’ve seen some modest progress. But we need more data to be confident that inflation is moving sustainably toward our 2% goal.”&nbsp;
</blockquote>
<h2 id="span-style-font-weight-400-rates-can-t-stay-too-high-for-too-long-span">Rates can’t stay too high for too long</h2>
But Powell is also worried about keeping the rates high for too long. There’s a delicate balance here. He has no choice but to tread extra carefully. 
“Elevated inflation isn’t our only risk,” he said. “Cutting rates too late could weaken economic activity and employment.”
Powell’s been preparing for the usual two day stint at the Capitol Hill, facing both the Senate Banking Committee and the House Financial Services Committee.&nbsp;
<figure id="attachment_553276" aria-describedby="caption-attachment-553276" style="width: 100%" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-553276 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/07/NINTCHDBPICT000546457141.webp" alt="Fed's Powell says he's not convinced enough to cut interest rates" width="1920" height="1280" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/07/NINTCHDBPICT000546457141.webp 1920w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/NINTCHDBPICT000546457141-300x200.webp 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/NINTCHDBPICT000546457141-1200x800.webp 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/NINTCHDBPICT000546457141-768x512.webp 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/NINTCHDBPICT000546457141-1536x1024.webp 1536w" sizes="(max-width: 1920px) 100vw, 1920px">
 <figcaption id="caption-attachment-553276" class="wp-caption-text">
 Capitol Hill is the seat of the United States Congress. Credit: Alamy
 </figcaption>
</figure>
Though it has been almost a year since the Federal Open Market Committee (FOMC) raised interest rates. The Fed’s overnight borrowing rate is currently between 5.25% and 5.50%, and this is the highest it’s been in 23 years. 
America is dealing with its highest inflation levels since the 1980s.
<h2 id="span-style-font-weight-400-rate-cuts-expectations-are-still-there-span">Rate cuts expectations are still there</h2>
Market expectations are now leaning toward the Fed beginning to cut rates in September, possibly followed by another quarter percentage point reduction by the end of the year.&nbsp;
However, the FOMC has said before that it is open to one rate cut. Now Powell and his colleagues have admitted that the latest data are a bit more optimistic after a surprising jump earlier in the year.&nbsp;
The Fed’s preferred measure is the personal consumption expenditures price index. As of May, it was at 2.6%, down from like 7% in 2022.&nbsp; Though Powell’s Capitol meeting is expected to get a little intense thanks to the heat of the presidential campaign.
The Dems have <a href="https://www.cnbc.com/2024/07/09/fed-chief-powell-says-holding-rates-high-for-too-long-could-jeopardize-economic-growth.html" rel="noopener noreferrer nofollow" target="_blank">demanded</a> that he cuts the rates sooner rather than later, because waiting too long could derail the progress that’s been made regarding job creations.
But Powell isn’t moved. He has made it a point to make sure everyone knows that his and the Federal Reserve’s political stance is neutral. As things stand, polling data shows chances of he Republicans taking over the White House to be quite high.
Reporting by Jai Hamid

Fed’s Powell says he’s not convinced enough to cut interest rates

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