Powell’s Patience: Why Rate Cuts Are Off the Table (For Now)

“Inflation Still High, Rate Cuts Must Wait”

• Inflation Has Fallen, But Remains Above Target

Powell noted that although inflation has eased significantly, core PCE inflation is still running at 2.8%, well above the Fed’s 2% target.

→ No clear signal for rate cuts yet.

• Labor Market is Balanced

Powell emphasized that the labor market remains strong with low unemployment, and is no longer a primary driver of inflation.

→ No urgency to ease policy.

• Downside Risks Have Increased, But Growth Remains Solid

Despite rising recession risks flagged by outside forecasters, Powell stated that the U.S. economy is still growing at a solid pace.

→ No immediate need for monetary easing.

• Monitoring Tariff Impacts

New tariffs could push short-term inflation higher, but the Fed will wait for real data before reacting.

→ No direct policy adjustment yet.

• Policy Stance: Patient and Data-Dependent

Powell affirmed that the current monetary policy stance is “well-positioned” and the Fed will remain patient and wait for more data.

→ Rate cuts are delayed further.