Powell Signals Rates Will Stay High Until Inflation Shows Clearer Progress

Federal Reserve Chair Jerome Powell said the central bank is in no hurry to cut interest rates, stressing that policymakers want to see sustained progress in inflation before easing policy. In a recent speech, Powell reiterated that rates will remain steady until price pressures move convincingly toward the Fed’s 2% target.

The message comes after the latest Consumer Price Index report showed inflation holding at 3.2%, a reading that suggests price growth remains sticky despite earlier signs of cooling. The data has tempered expectations for an imminent rate cut and reinforced the Fed’s cautious stance.

Markets have still not fully abandoned hopes for lower borrowing costs later this year. According to current pricing, investors see roughly a 75% chance of a rate cut in December. Even so, Powell’s remarks indicate that any move will depend on additional evidence that inflation is easing in a durable way.

The Fed has kept rates elevated to restrain demand and bring inflation under control, but officials have repeatedly said they want more confidence that progress is lasting before changing course. For now, the central bank appears committed to holding rates steady and waiting for clearer signs that inflation is returning to target.