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Fed Chair Powell Says Officials Need More ‘Good’ Data Before Cutting Rates


Jerome H. Powell, the chair of the Federal Reserve, made clear during a “60 Minutes” interview aired on Sunday night that the central bank is moving toward cutting interest rates as inflation recedes, but that policymakers need to see continued progress toward cooler price increases to make the first move.

Mr. Powell was interviewed on Thursday, after the Fed’s meeting last week but before Friday’s blockbuster jobs report. He reiterated his message that lower borrowing costs are coming. But he also said that the Fed’s next meeting in March is probably too early for policymakers to feel sure enough that inflation is coming under control to reduce rates.

“We think we can be careful in approaching this decision just because of the strength that we’re seeing in the economy,” Mr. Powell said during the interview, based on a transcript released ahead of its airing. He added that officials would want to see to a continued moderation in price increases, even after several months of milder readings.

The progress on inflation “doesn’t need to be better than what we’ve seen, or even as good. It just needs to be good,” Mr. Powell said.

His remarks reaffirm that lower borrowing costs are likely coming this year — a change that could make mortgages, car loans and credit card debt cheaper for Americans. They also underscore how much better today’s economic situation is proving to be than what economists and Fed officials expected just a year ago.

Many forecasters had predicted that the Fed’s rapid campaign of interest rate increases, which pushed borrowing costs from near zero to a range of 5.25 to 5.5 percent from March 2022 to July 2023, would slow the economy so much that it might even spur a recession. Central bankers themselves — including Mr. Powell — believed that some economic pain would probably be needed to cool consumer and business demand enough to prod businesses to stop raising prices so quickly.

Instead, employers are hiring rapidly, unemployment is hovering at a historically low 3.7 percent, and wage gains have finally eclipsed price increases in recent months.

“I was being honest in saying that we thought there would be pain,” Mr. Powell said in the interview aired Sunday. “And we thought that the pain would likely come, as it has in so many past cycles, in the form of higher unemployment. That hasn’t happened.”

Still, elevated prices for many products — including groceries — have combined with expensive borrowing costs and high housing prices to erode economic confidence. Mr. Powell acknowledged that unhappiness in his interview.

“I think people have been patient and have been through a pretty difficult time,” he said. “And I think now we’re coming through that time and starting to feel a little bit better about things. Mortgages rates have come down in anticipation, come down a bit in anticipation of lower rates.”

Mr. Powell was clear that the central bank’s policy decisions would not be affected by the presidential election later this year.

The Fed is at times a political talking point. Former President Donald J. Trump, who is running for re-election, has already begun to criticize the central bank and Mr. Powell specifically on the campaign trail. But the Fed is insulated from the White House and is meant to set policy free from political influence. Its officials vigorously protect that level of independence, given the unpopular decisions they must sometimes make to cool the economy and ward against inflation.

Mr. Powell reiterated his dedication to that freedom from political influence in the interview.

“Integrity is priceless, and at the end, that’s all you have,” he said. “We plan on keeping ours.”


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