Jerome Powell still thinks the Federal Reserve’s next move on interest rates will be a cut.
The Fed on Wednesday held its benchmark federal funds target steady at a range of 5.25 percent to 5.50 percent but acknowledged that progress on inflation has stalled in recent months.
The Fed chairman does not think the re-ignition of inflation will prompt a rate hike.
“I think it’s unlikely that the next policy rate move will be a hike,” Powell said during a Wednesday press conference following the Fed’s two-day meeting. “What will it take? Would need to see persuasive evidence that our policy is not sufficiently restrictive, but that is not what we are seeing.”
Although unready to seriously consider rate hikes at this time, the Fed has shifted its stance on the timing of rate cuts. Recent firming of inflation means cuts are further off than they appeared to be earlier this year.
“It is likely that gaining such greater confidence will take longer than previously expected,” Powell said.
