Powell: Fed not far from cutting interest rates

Powell has indicated that interest rate cuts may not be too far off if inflation signals cooperate. Powell did not provide a precise timetable of when easing could happen, but noted that the day could be coming soon.

Powell said the cuts would be so the Fed doesn’t drive the economy into recession rather than normalizing policy as the economy gets back to normal.

Powell spoke at a time when financial markets have swung considerably in their expectations on Fed policy. The outlook now is for the first cut to come in June, with four reductions totaling a full percentage point by the end of 2024.

Inflation data indicates the pace of price increases is continuing to slow, though the consumer price index rattled markets when it came in higher than expected for January.