There has been an overwhelming optimism among investors that the Federal Reserve is done with its interest rate hikes, as recent stock market trends show. Some even believed that interest rate cuts could follow soon. However, that won’t be the case, according to Fed chairman Jerome Powell.
Speaking during an event at Atlanta’s Spelman College, Powell said that the Federal Reserve still isn’t assured that the fight with inflation is over or that inflation will get to the Fed’s target mark of 2%.
“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might ease,” Powell said.
According to Powell, the Fed will rely on economic data to determine how to approach interest rate movement.
“Having come so far so quickly, the (Federal Open Market Committee) is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” he added.
One thing that seems fairly certain is that the Fed will likely keep the 5.25%-5.50% rate at least until the end of 2024. The rate has been unchanged for the past two meetings, and experts expect it to stay put for the upcoming December meeting as well.