Recent inflation data indicate the central bank may need more time to feel comfortable lowering interest rates, Fed Chair Powell said during a panel discussion at the Wilson Center in Washington alongside Bank of Canada Governor Macklem. “The recent data have clearly not given us greater confidence and instead indicate that is likely to take longer than expected to achieve that confidence,” Powell said. “Given the strength of the labor market and progress on inflation so far, it is appropriate to allow restrictive policy further time to work and let the data and the evolving outlook guide us,” he added. This indicates that Fed officials don’t feel a pressing need to lower rates and implies that any rate cuts in 2024 may occur toward the end of the year, if they happen at all.
