| US Federal Reserve chairman Jerome Powell cautioned that persistently elevated inflation will likely delay any Fed interest rate cuts until later this year, opening the door to a period of higher-for-longer rates.
His remarks represented a shift for Powell, who on March 7 had told a Senate committee that the Fed was “not far” from gaining the confidence it needed to cut rates. At a news conference on March 20, Powell appeared to downplay that assertion. But his comments on Tuesday went further in dimming the likelihood of any rate cuts in the coming months.
Powell’s comments followed a speech earlier on Tuesday by Fed vice chairman Philip Jefferson, who also appeared to raise the prospect that the Fed would not carry out three cuts this year in its benchmark rate. The Fed’s rate stands at a 23-year high of 5.3 per cent after 11 rate hikes beginning two years ago.
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