WASHINGTON (AP) \u2014 Federal Reserve Chair Jerome Powell on Friday reiterated a message he has sounded in recent weeks: While the Fed expects to cut interest rates this year, it won\u2019t be ready to do so until it sees \u201cmore good inflation readings\u2019\u2019 and is more confident that annual price increases are falling toward its 2% target.<\/p>\n\n\n\n
Speaking at a conference at the Federal Reserve Bank of San Francisco, Powell said he still expected \u201cinflation to come down on a sometimes bumpy path to 2%.\u2019’ But the central bank\u2019s policymakers, he said, need to see further evidence before they would cut rates for the first time since inflation shot to a four-decade peak two years ago.<\/p>\n\n\n\n
The Fed responded to that bout of inflation by aggressively raising its benchmark rate beginning in March 2022. Eventually, it would raise its key rate 11 times to a 23-year high of around 5.4%. The resulting higher borrowing costs helped bring inflation down \u2014 from a peak of 9.1% in June 2022 to 3.2% last month. But year-over-year price increases still remain above the Fed\u2019s 2% target.<\/p>\n\n\n\n
Forecasters had expected higher rates to send the United States tumbling into recession. Instead, the economy just kept growing \u2014 expanding at an annual rate of 2% or more for six straight quarters. The job market, too, has remained strong. The unemployment rate has come in below 4% for more than two years, longest such streak since the 1960s.<\/p>\n\n\n\n
The combination of sturdy growth and decelerating inflation has raised hopes that the Fed is engineering a \u201csoft landing\u2019\u2019 \u2014 taming inflation without causing a recession. The central bank has signaled that it expects to reverse policy and cut rates three times this year.<\/p>\n\n\n\n
But the economy\u2019s strength, Powell said, means the Fed isn\u2019t under pressure to cut rates and can wait to see how the inflation numbers come in.<\/p>\n\n\n\n
Asked by the moderator of Friday\u2019s discussion, Kai Ryssdal of public radio\u2019s \u201cMarketplace\u2019\u2019 program, if he would ever be ready to declare victory over inflation, Powell demurred:<\/p>\n\n\n\n
\u201cWe\u2019ll jinx it,\u2019’ he said. \u201dI\u2019m a superstitious person.\u2019’<\/p>\n\n\n\n