Policymakers are not ready to cut interest rates yet as the central bank held rates at their two-decade high, Federal Reserve Chairman Jerome Powell said on Wednesday, as concerns about inflation remain top of mind for the Fed.The Federal Reserve has been engaged in a historic battle against soaring inflation that at one point hit a 40-year high. In response, beginning in March 2022, the central bank raised rates to their current level of 5.25 to 5.5 percent.
'Powell suggested that policymakers may have underestimated the strength of household savings which explained why people were still spending in the economy, fueling strong job creation, pushing up wages, which in turn raises disposable incomes and spurs spending again and drives more hiring.'The thing is we've been achieving progress on inflation in the middle of this,' he said. 'The question is how long can that continue.