Powell: Rate Cut is Imminent, but Unlikely to Have Confidence for a Cut in March

Federal Reserve Chairman Powell's interview on “60 Minutes” aired, during which host Pelley asked Powell, “You disappointed a lot of people last week. The next meeting to decide the direction of interest rates will be in March this year. Based on what you know now, is there a greater or lesser likelihood of a rate cut at that time？”

Chairman Powell responded, “The current overall situation is that the economy is strong, the labor market is strong, and inflation is decreasing. My colleagues and I are trying to choose an appropriate time to start reducing our restrictive policy stance. That time is approaching. We have stated that we want to have more confidence in inflation reaching 2%, and I think the committee is unlikely to have that level of confidence at the March meeting in 7 weeks. Except for two participants, all other participants believe it is appropriate to start easing the restrictive stance through rate cuts this year. So, that's the basic situation, and we just want to find the right time.”

During the interview, Pelley also asked Powell, “In the December 2023 Fed forecast, is it still possible for this year's rate cuts to bring interest rates down to around 4.6%？” Powell said, “These forecasts were made in December last year, and these are individual forecasts from participants, not the committee's plan. We will update them at the March meeting. However, I want to say that during this period, nothing would make me think that the committee would significantly change their forecasts.”