Powell Reiterates Fed Doesn't 'Need To Be In A Hurry' To Lower Interest Rates

(RTTNews) - Federal Reserve Chair Jerome Powell delivered his semiannual monetary policy testimony before the Senate Banking Committee on Tuesday, reiterating his belief that the central bank does "not need to be in a hurry" to adjust its policy stance.

Powell noted interest rates have been lowered by a full percentage point since last September, describing the Fed's current policy stance as "significantly less restrictive than it had been."

"We know that reducing policy restraint too fast or too much could hinder progress on inflation," Powell said. "At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment."

The Fed chief reiterated that the central bank will assess incoming data, the evolving outlook, and the balance of risks in considering the extent and timing of additional adjustments to interest rates.

Powell also suggested the Fed has options in determining the future path for rates depending on how the economy evolves.

"If the economy remains strong and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer," Powell said. "If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly."

He continued, "We are attentive to the risks to both sides of our dual mandate, and policy is well positioned to deal with the risks and uncertainties that we face."

Powell also stressed the Fed remains committed to supporting maximum employment, bringing inflation sustainably to its 2 percent goal and keeping longer-term inflation expectations well anchored.

In his opening remarks, Powell also described the U.S. economy as "strong overall" and said significant progress has been made towards the Fed's dual-mandate goals of maximum employment and stable prices.

"Labor market conditions have cooled from their formerly overheated state and remain solid," Powell said. "Inflation has moved much closer to our 2?percent longer-run goal, though it remains somewhat elevated. We are attentive to the risks on both sides of our mandate."

Following its first monetary policy meeting of 2025 in late January, the Fed announced its widely expected decision to leave interest rates unchanged after cutting rates for three straight meetings.

The Fed's next monetary policy meeting is scheduled for March 18-19, with CME Group's FedWatch Tool currently indicating a 95.5 percent chance the central bank will once again maintain the target range for the federal funds rate at 4.25 to 4.50 percent.