There were two comments from Federal Reserve Chair Jerome Powell this week that could set up what is likely for this year for those who care about interest rates. And that is most of us.
“We believe that our policy rate is likely at its peak for this tightening cycle.”
“If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”
Translation: There are no rate increases expected by the Fed this year. And current rates should fall later this year.
Powell spoke before the U.S. House Financial Services Committee. For the Fed, according to Powell, it comes down to confidence. Fed members need to have confidence that inflation will drop to the board’s goal of 2%.
While his comments did not provide a specific timeline, they did express optimism. “When we do get that confidence…” Powell told the members of Congress, “…And we’re not far from it…it’ll be appropriate to implement rate cuts.”
RELATED: CNBC breaks down Jerome Powell’s comments about what to expect from the Fed this year. Read that here.
Higher interest rates could be weighing down Americans’ confidence in the direction of the country. Here is the average of national polls over the past six weeks.
Right Direction: 23.1%
Wrong Direction: 67.1%
Source: Real Clear Politics
