The Federal Reserve maintains a cautious posture, without hurrying to cut interest rates, while closely observing the strength of the economy and the evolution of inflation.
The president of the Federal Reserve, Jerome Powell, is in these minutes answering questions before the US Senate. Economists expect legislators to press Powell on what he meant when he said there is no “hurry” to further reduce the reference interest rate.
Senator Elizabeth Warren, Massachusetts Democrat and new minority member in the Senate Banking Committee, urged Jerome Powell to cut the fees at the next Fed policy meeting in March. “I urge you to act more quickly to reduce interest ratesstarting with a significant cut next month, “Warren said at the beginning of the audience.
Other outstanding points of Powell’s testimony
In his testimony before the Senate, the president of the Federal Reserve, Jerome Powell, reaffirmed that the institution has no plans to modify its inflation objective of 2% and that it does not consider increasing interest rates at this time.
Although inflation has advanced towards this goal, he acknowledged that it remains high, and the labor market, although solid, does not present significant inflationary pressures.
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Powell expressed a general optimism about the economy, but clarified that, if inflation is stabilized or the labor market weakens unexpectedly, the Fed could choose to maintain stable rates for longer or even relieve monetary policy.
Economists point out that Fed generally avoids abrupt changes in its interest rate approach, preferring a more gradual and observational strategy.
Source: Ambito
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