FILE - Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, June 12, 2024. Powell testifies to the House Financial Services Committee on Wednesday, July 10, 2024, the second of two days of semi-annual testimony to Congress.
On Tuesday, when Powell addressed the Senate Banking Committee, he suggested that the Fed had made “considerable progress” toward its goal of defeating the worst inflation spike in four decades and noted that cutting rates “too late or too little could unduly weaken economic activity and employment.”“For a long time,” Powell said Wednesday, “we’ve had to focus on the inflation mandate.” As the economy roared out of the pandemic recession, inflation reached a four-decade high in mid-2022.
Powell told the House panel on Wednesday that to avoid damaging the economy, the Fed likely wouldn’t wait until inflation reached its 2% target before it would start cutting rates.