Fed in No Rush to Change U.S. Interest Rates, Powell States

Federal Reserve Chair Jerome Powell stated yesterday that the central bank needs no rush to adjust interest rates amid growing economic uncertainty.

Speaking at the University of Chicago Booth School’s Monetary Policy Forum in New York, Powell emphasized patience while waiting for clarity on Trump administration policies.

“We do not need to be in a hurry, and are well positioned to wait for greater clarity,” Powell declared in his remarks. The Fed maintains its benchmark interest rate between 4.25% and 4.5%, unchanged since December 2024.

Powell pointed to significant policy shifts under the Trump administration affecting trade, immigration, fiscal policy, and regulation.

He stressed that the combined impact of these changes will determine the Fed’s future monetary decisions.

The February jobs report released Friday showed the economy added 151,000 jobs, slightly below market expectations of 160,000.

The unemployment rate stands at 4.1%, while employers have created a solid average of 191,000 jobs monthly since September.

Inflation concerns remain at the forefront of Fed policy discussions. Current data shows total PCE prices rose 2.5% over the 12 months ending January 2025.

Core PCE prices, which exclude food and energy, increased 2.6%, still above the Fed’s 2% target.

Fed in No Rush to Change U.S. Interest Rates, Powell States

Powell acknowledged rising near-term inflation expectations, noting both consumers and businesses mention tariffs as a driving factor.

He warned that tariffs might cause more than just one-time price increases if they become a series of hikes.

Market expectations for rate cuts have shifted following Powell’s comments. Traders now see reduced chances of a March rate cut, with projections of three quarter-point cuts by year-end.

The Fed will meet on March 18-19, where analysts expect rates to remain unchanged. Powell confirmed the central bank stands ready to maintain restrictive policy if inflation persists or ease policy if the labor market unexpectedly weakens.

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