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20 hours ago
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Investing.com -- Federal Reserve Chairman Jerome Powell said Thursday that economy isn't signalling a need for speed on rate cuts as the recent strength allows the Fed to take a careful approach to monetary policy decisions.
"The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully," Powell said in a speech Thursday.
The Fed chief also said the central bank remains "confident" that the strength in the economy and labor market can be maintained.
"We are confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained, with inflation moving sustainably down to 2 percent," he added.
The Fed chief reiterated that the Fed is aware of the risks of moving too fast or too slow on rate cuts.
"We know that reducing policy restraint too quickly could hinder progress on inflation. At the same time, reducing policy restraint too slowly could unduly weaken economic activity and employment," Powell added.
The remarks from Powell following a slew of Fed speak this week. Some Fed members including Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said that a upside surprise in inflation in weeks leading up to the Federal Reserve's December meeting, could encourage the central bank to pause rate cuts.
The Minneapolis Fed president also floated the idea of a higher neutral rate keeping a lid on the how much the Fed would be able to cut during the current easing cycle.
Other Fed members suggested the Fed can take its time to assess incoming data and future monetary policy amid a robust economic backdrop.
"Given current economic conditions and the balance of risks, I believe the FOMC can judiciously and patiently evaluate incoming information in considering further lowering of the policy rate," Musalem said in prepared remarks on Wednesday to the Economic Club of Memphis.
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