In his speech in Dallas, Powell said it wouldn’t be a surprise to see slow progress on the inflation front moving into 2025, with further upward movement possible. “Core measures of goods and services inflation, excluding housing, fell rapidly over the past two years and have returned to rates closer to those consistent with our goals,” he said. “We expect that these rates will continue to fluctuate in their recent ranges.”
Speech by Chair Powell on the economic outlook @DallasFed: https://t.co/IjHaJLJMcZ
Watch live: https://t.co/Dz8jDnlS5M
— Federal Reserve (@federalreserve) November 14, 2024
The overall consumer price index (CPI) has dipped since hitting its highest level in decades (9.1%) at the beginning of 2022, thanks in large part to the Fed’s aggressive series of rate hikes in that year and 2023. Still, while it continues to trend towards the central bank’s 2% target, “it is not there yet,” Powell cautioned. “We are committed to finishing the job.”
The central bank is next scheduled to meet on December 17-18, with Powell noting inflation and jobs data would be keenly watched in the weeks before those deliberations. He also suggested sluggish jobs figures could potentially tip the balance in favor of a cut at that meeting. “The economy is doing very well, and that’s a great thing. We totally welcome that,” he said. “But look at the labor market.”
At present, the Fed is “right where we need to be,” Powell said, “and we can be careful about [cutting rates].”
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