Powell Hints at Steady Rate Cuts Amid Slowing Inflation

Federal Reserve Chair Jerome Powell suggested a slowdown in inflation could allow for a slower yet steady pace of interest rate reductions. Powell's remarks at a National Association for Business Economics conference indicate potential rate cuts totaling 50 basis points this year, emphasizing a data-dependent approach.

Federal Reserve Chair Jerome Powell hinted at a gradual reduction in interest rates as inflation continues to slow, potentially opening the door for a steady pace of rate cuts. Speaking at the National Association for Business Economics conference in Nashville, Tennessee, Powell stressed that the Fed does not have a predetermined path for rate reductions.

Powell highlighted that the U.S. economy could see a total of 50 basis points cut in interest rates this year if economic conditions unfold as expected. However, he maintained that adjustments could be made based on how the economy performs, indicating flexibility in the Fed's approach.

As a result of Powell's comments, market reactions were mixed. The S&P 500 saw a slight loss, bond yields rose, and the dollar index gained. Analysts suggest that Powell's cautious stance is intended to temper expectations of rapid rate cuts while recognizing ongoing pockets of economic strength.

(With inputs from agencies.)