2024.03.0613:15:00UTC+00Powell Says Rate Cuts Likely This Year But Still Needs 'Greater Confidence' Inflation Is Slowing

Federal Reserve Chair Jerome Powell will tell members of Congress on Wednesday that it will likely be appropriate for the central bank to begin lowering interest rates at "some point this year" but reiterate officials need "greater confidence" inflation is moving sustainably toward 2 percent.

In prepared remarks before the House Financial Services Committee, Powell described the economic outlook as "uncertain" and said progress towards the Fed's 2 percent inflation objective is "not assured."

"Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2 percent," Powell said.

He added, "At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment."

Powell said future interest rate decisions will be based on careful assessment of the incoming data, the evolving outlook, and the balance of risks.

The Fed Chief said the central bank remains committed to bringing inflation back down to 2 percent and to keeping longer-term inflation expectations well anchored.

"Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run," Powell said.

The Fed's next monetary policy meeting is scheduled for March 19-20, with the central bank widely expected to leave interest rates unchanged.

While the Fed is also expected to keep rates unchanged in its following meeting ending May 1, a rate cut is seen as likely as early as its June 11-12 meeting.