Fed Chair Jerome Powell suggested that a rate cut issued at his committee’s March 19-20 meeting is unlikely.
The U.S. Federal Reserve opted to keep its benchmark federal interest rate steady for a fourth straight iteration on Jan. 31, and signalled that while it is eyeing rate cuts in 2024, one isn’t likely to happen in the immediate future.
In its Federal Open Markets Committee (FOMC) release, the U.S. central bank said it elected to maintain the 5.25-5.5% target range for the federal funds rate. Those hoping for a rate cut will have to wait longer, with the committee stating that it doesn’t expect such a rate reduction will be appropriate until it has gained greater confidence that inflation is moving sustainably toward 2%.
“It’s a highly consequential decision to start the process” of lowering interest rates “and we want to get that right,” Fed Chair Jerome Powell said at a Jan. 31 news conference. “We’ve made a lot of progress on inflation. We just want to make sure that we do get the job done in a sustainable way.”
“I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting” (to justify a rate cut), “but that’s to be seen,” Powell added.
That next FOMC meeting will be held March 19-20.
As it shared throughout 2023, the FOMC release reiterated that the committee is prepared to adjust its stance if risks emerge that would impede the 2% inflation goal, while assessing a wide range of market information.
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Mike Hockett
Mike Hockett is MDM’s executive editor, having joined the publication in March 2022. He oversees MDM’s editorial content and direction, coordinates with contributing authors, conducts interviews with executives in the wholesale distribution space and serves as the editorial face of MDM at industry events. He has extensively covered the distribution and manufacturing sectors since 2014. Hockett works from his home in Madison, WI. He can be contacted at mike@mdm.com.
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