Dec. 1 (UPI) — Federal Reserve Chair Jerome Powell said Friday that speculation about interest rate cuts to loosen monetary policy is premature.
Delivering remarks at Atlanta’s Spelman College, Powell said while repeated rate hikes have worked to lower inflation it was still well above the 2% annual target.
“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” Powell said.
He added the Fed was “prepared to tighten policy further if it becomes appropriate to do so.”
“We have made considerable progress in reducing high inflation while maintaining a strong labor market,” Powell said. “The Federal Open Market Committee is strongly committed to bringing inflation down to 2% over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective.”
The Fed is tasked with twin goals of maintaining maximum employment while preserving price stability for a strong healthy economy, Powell said.
In its last rate hike decision last month, the Fed decided to leave interest rates unchanged at 5.25%-5.5%.
He also noted decisions on interest rate cuts or hikes will be made meeting by meeting based on incoming data.
Powell said the full effects of the Fed’s monetary tightening haven’t yet been felt and he anticipates economic growth will slow as the effects fully kick in.
