From CNBC: 2024-04-16 14:14:27

Federal Reserve Chair Jerome Powell stated that despite the strength of the U.S. economy, inflation has not met the central bank’s goal, hinting at no immediate interest rate cuts. Policy will likely remain steady until inflation approaches the target.

Treasury yields increased as Powell spoke, with the 2-year note briefly topping 5% and the 10-year yield rising 3 basis points. The S&P 500 fluctuated post-speech, briefly turning negative before recovering. Powell highlighted the February core inflation rate at 2.8%, emphasizing the need for sustainable progress towards the 2% goal.

Initial expectations for multiple rate cuts in 2023 have shifted to only a few, with traders now anticipating one or two cuts, not starting until September. FOMC officials projected three cuts in March, but the data-dependent nature of policy may lead to changes in the future.

Read more: Fed Chair Powell says there has been a ‘lack of further progress’ this year on inflation