Powell Says Fed Has Time to Assess Data Before Deciding to Cut

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Federal Reserve Chair Jerome Powell signaled policymakers will wait for clearer signs of lower inflation before cutting interest rates. Recent inflation figures did not materially change the overall picture. Powell reiterated his expectation that it will likely be appropriate to begin lowering rates at some point this year. The Federal Open Market Committee held interest rates steady last month. Officials narrowly maintained their outlook for three interest-rate cuts this year. Powell and other Fed officials have repeatedly said they are in no hurry to cut rates, and that their moves will depend on incoming data. Investors are putting roughly even odds on an initial cut in June. Powell's prepared remarks reinforce those he's made following the March meeting. The Fed's preferred gauge of underlying inflation cooled in February after an even larger increase than previously reported in January. Powell said last month that an unexpected weakening in the labor market could warrant a policy response from Fed officials. The Fed will get another update on the health of the job market Friday with the release of the monthly employment report, which is expected to show a gain of 213,000 jobs in March. Fed officials in March were split on how aggressive rate cuts will be this year. The central bank's dot plot showed 10 officials forecast three or more quarter-point cuts this year, while nine anticipated two or fewer. Powell detailed the outsized role supply-side factors like population growth have had in the inflation recovery. The Fed chair also used part of his speech to emphasize that the central bank makes its decisions independent from politics.

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