Powell Tells 60 Minutes Fed "Not Likely" To Cut In March, Calls Americans Lazy
In his highly anticipated 60-Minutes interview, Jerome Powell did not deliver any new shocks, and unlike the Fed's dovish December pivot, there were no major surprises: instead, the Fed Chair echoed what he said last week, predicting that the Fed policymakers will likely wait after March to cut interest rates as he sought to explain the central bank’s rationale for eventual reductions to a broad public audience (amid mounting pressure by Democrats to cut aggressively ahead of December even as the Biden Dept of Labor fabricated jobs data to make it seem like the US is enjoying a golden ago for workers).
In an interview conducted on Thursday with CBS’s 60 Minutes and airing Sunday evening, Powell reiterated that Fed officials want to see more economic data to assure that inflation is on a sustainable path to their 2% goal.
"The danger of moving too soon is that the job’s not quite done, and that the really good readings we’ve had for the last six months somehow turn out not to be a true indicator of where inflation’s heading,” Powell said in the interview adding that while “we don’t think that’s the case… the prudent thing to do is to, is to just give it some time and see that the data continue to confirm that inflation is moving down to 2% in a sustainable way.”
Powell then said it isn’t likely that the Fed “will reach that level of confidence” about inflation’s path by its March 19-20 gathering, echoing remarks he made at a press conference Wednesday, and certainly not after the latest laughably ridiculous and political manipulated jobs number. He clarified that while most FOMC members are now dovish and expect rate cuts, that's certainly not the case for all, to wit: “all but a couple of our participants do believe it will be appropriate to, for us to begin to dial back the restrictive stance by cutting rates this year,” Powell said. “And so, it is certainly the base case that, that we will do that. We’re just trying to pick the right time, given the overall context.” Here is the full exchange:
PELLEY: The next meeting around this table that will decide the direction of interest rates is in this coming March. Knowing what you know now, is a rate cut more likely or less likely at that time?
POWELL: So, the broader situation is that the economy is strong, the labor market is strong, and inflation is coming down. And my colleagues and I are trying to pick the right point at which to begin to dial back our restrictive policy stance. That time is coming. We've said that we want to be more confident that inflation is moving down to 2%. And I would say, and I did say yesterday, that I think it's not likely that this committee will reach that level of confidence in time for the March meeting, which is in seven weeks.
So, I would say that's not the most likely or base case. However, all but a couple of our participants do believe it will be appropriate to, for us to begin to dial back the restrictive stance by cutting rates this year. And so, it is certainly the base case that, that we will do that. We're just trying to pick the right time, given the overall context.
While inflation has subsided substantially in recent months, Powell has repeatedly emphasized the central bank’s need to see more data before lowering borrowing costs. He indicated last week a rate cut is unlikely in the first quarter.
The central banker also said he didn’t expect policymakers to “dramatically” change their forecasts for rates next year, which in December showed they expect their benchmark lending rate to reach 4.6% by the end of 2024, suggesting three rate cuts remains the baseline.
PELLEY: This past December in your quarterly report, the Fed predicted rate cuts this year down to about 4.6%. Still likely?
POWELL: Those forecasts were made in December. And those are individual forecasts made by participants. It's not a committee plan. We don't update those at every meeting. We'll update them at the March meeting. I will say, though, nothing has happened in the meantime that would lead me to think that people would dramatically change their forecasts.
PELLEY: So something around a 4.6% interest rate is likely?
POWELL: I would say it this way. It's really going to depend on the data. The data will drive these decisions. And we can't do any better than to look at the data and ask ourselves, "How is this affecting the outlook and the balance of risks?" That's what we'll be doing. So, what we actually do will depend on how the economy evolves.
https://www.zerohedge.com/markets/powell-tells-60-minutes-fed-not-likely-cut-march