Federal Reserve Chair Jerome Powell said inflation data released Friday is “pretty much in line with our expectations,” but reiterated it won’t be appropriate to lower rates until officials are confident inflation is on track toward their 2% goal.
“It’s good to see something coming in in line with expectations,” Powell said Friday at an event at the San Francisco Fed, but added that the latest readings aren’t as good as what policymakers saw last year.
“We don’t need to be in a hurry to cut,” he said.
Fed officials held short-term interest rates at a more than two-decade high when they met earlier this month, and a narrow majority penciled in three rate cuts for 2024.
Powell said after the meeting that it would likely be appropriate to ease policy “at some point this year.” But he and other policymakers have made clear they’re in no rush given the underlying strength of the economy and recent signs of persistent price pressures.
Inflation has eased substantially from a 40-year peak reached in 2022, decelerating at a particularly fast clip last year. That progress appeared to stall in January and February, with a pickup in consumer price growth.
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The Fed’s preferred gauge of underlying inflation cooled last month after an even larger increase than previously reported in January, government data released Friday showed. The core personal consumption expenditures price index — which excludes volatile food and energy costs — rose 0.3% in February after climbing 0.5% in the previous month, marking its biggest back-to-back gain in a year.
Meanwhile, the US economy has remained resilient despite high interest rates. Inflation-adjusted consumer spending topped all economists’ estimates in February, and employers are still hiring workers at a robust clip. Data out earlier this week showed economic growth in the fourth quarter was stronger than originally thought.
