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Fed Chief Jerome Powell says a March rate cut is not likely

Federal Reserve Chair Jerome Powell holds a press conference following the release of the Fed’s interest rate policy decision at the Federal Reserve in Washington, U.S., January 31, 2024. 

Evelyn Hockstein | Reuters

Fed Chairman Jerome Powell said Wednesday that the central bank would likely not have the confidence about inflation to cut rates as soon as March.

“Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that. But that’s to be seen,” Powell said.

The statement came in a press conference after the Fed’s January meeting, where the central bank left its benchmark interest rate unchanged. Powell did say earlier in the press conference that rate cuts would likely come at some point this year.

Stocks fell to their session lows following Powell’s comment on March as the Fed chief dashed hopes of traders who want the central bank to slash rates sooner before there’s a recession. The Dow Jones Industrial average lost as much as 250 points at one point.

The central bank’s next two policy decision dates are scheduled for March 20 and May 1. In recent months, traders and Wall Street strategists have focused on those two dates as candidates for the first rate cut, as inflation continues to fall and job growth slows.

Powell also declined to commit to a series of rate cuts once the Fed makes its first move, saying that it “would depend on the data.”

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