In an appearance on 60 Minutes Sunday, Jerome Powell said the Federal Reserve is still on track to cut interest rates three times in 2024. The Fed chair acknowledged that as the central bank has raised its benchmark rate 11 times since 2022 to fight inflation, Americans looking to buy a home have been particularly impacted. He urged patience, Axios reports. "It's very important for that young couple—and particularly for younger couples starting out who may not have great financial means, that we succeed in this effort [to fight inflation]," he said. "But what that means is that interest-sensitive spending like mortgages and buying, you know, durable goods and things like that, that's going to be expensive for a while." With the job market and economy strong, Powell indicated rate cuts could be coming, though he warned the next meeting in March is too early for such a move, the AP reports.
Economists expect cuts are more likely to start in May or June. "I think people have been patient and have been through a pretty difficult time. And I think now we're coming through that time and starting to feel a little bit better about things," Powell said. "But, you know, we do what we're charged to do when we need to do it. And that was to try to slow the economy down a bit. And the interest to get inflation down in the interest-sensitive areas, particularly housing are, you know, a good example of the kinds of things that do slow down when rates go up." Powell had made similar remarks at a Wednesday news conference after the Fed kept its key interest rate at 5.4%, the highest it's been in 22 years. Fed officials have indicated they envision the benchmark rate to be down to 4.6% by the end of the year. Despite inflation slowing, however, Powell warned that "we don't expect to see a decline in the overall price level" of goods and services. (More Jerome Powell stories.)
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