Powell: Rate cuts must wait until confident inflation moving down to 2%

The test for Federal Reserve interest rate cuts down the road is confidence that inflation is moving lower and any reduction will need to wait until policymakers are confident inflation is moving down to the central bank's 2% target, Fed Chair Jerome Powell said on Thursday. "We don't see that happening any time soon," Powell told the Senate Banking Committee in the second day of congressional testimony.

The test for Federal Reserve interest rate cuts down the road is confidence that inflation is moving lower and any reduction will need to wait until policymakers are confident inflation is moving down to the central bank's 2% target, Fed Chair Jerome Powell said on Thursday. "We don't see that happening any time soon," Powell told the Senate Banking Committee in the second day of congressional testimony. "The test for that is that we're confident that inflation is moving back down to our 2% goal. We want to have some confidence."

While the latest median projection among Fed policymakers does show rates could begin declining next year, Powell said, "It's going to have to await a time when we're confident inflation is moving down to 2%." (Reporting By Dan Burns, Editing by Franklin Paul)