From CNBC:

Federal Reserve Chair Jerome Powell reiterated that interest rates are expected to decrease this year but no specific timeline was given. Policy will be based on incoming data to ensure inflation reaches the 2% target sustainably. Powell noted that lowering rates too quickly may harm the battle against inflation and additional rate hikes may be necessary.

Powell’s recent speech did not introduce any new monetary policy information but highlighted concerns about maintaining progress against inflation. Federal Reserve officials are cautiously approaching rate cuts, with the first expected to come in June. Markets had previously anticipated aggressive easing, but the Fed is now emphasizing data-driven decision-making.

Despite resistance to immediate rate cuts, Powell acknowledged the progress made in achieving the 2% inflation target without negatively impacting the labor market and broader economy. Overall, the economy has shown notable improvements, with inflation rates easing substantially in 2023. Powell faces questions during a two-day visit to Capitol Hill, with a focus on maintaining stability in the face of political pressures during the presidential election year.

Concerns linger about the impact of politics on the Federal Reserve’s decisions, particularly during an election year. Powell will navigate questioning from lawmakers, including pressure from some Democrats to reduce rates to alleviate financial burdens on lower-income families. Former President Donald Trump’s criticism of Powell and the Fed during his tenure adds an additional layer of complexity to the situation.



Read more: Powell reinforces position that the Fed is not ready to start cutting interest rates