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WASHINGTON (AP) — Federal Reserve Chair Jerome Powell suggested Thursday that the Fed is in no hurry to further raise its benchmark interest rate, given evidence that inflation pressures are continuing to ease at a gradual pace.
Powell said he believes the Fed faces nearly equal risks of raising its benchmark rate too high, which could derail the economy, or not raising it high enough, which could allow inflation to persist or worsen.
“We will continue to move carefully,” he said, a phrase he has used often that is widely interpreted to mean that the Fed will closely monitor incoming data but it isn't leaning toward a hike.
The Fed has raised its key rate 11 times since March 2022, leading to much higher rates on many consumer and business loans.
Last week, at a news conference, Powell suggested that keeping the Fed's benchmark rate at a peak for a prolonged period could help slow the economy and cool inflation without further rate hikes. The Fed has raised its key rate 11 times since March 2022, leading to much higher rates on many consumer and business loans.
The central bank's benchmark short-term rate, now about 5.4%, is at its highest level in 22 years. Yet the Fed has raised rates only once since May, and most economists say they think the central bank is likely done tightening credit.