After run of inflation surprises.
Federal Reserve Chair Jerome Powell signaled policymakers will wait longer than previously anticipated to cut interest rates following a series of surprisingly high inflation readings. Powell pointed to the lack of additional progress made on inflation after the rapid decline seen at the end of last year, noting it will likely take more time for officials to gain the necessary confidence that price growth is headed toward the Fed’s 2% goal before lower borrowing costs.
Policymakers narrowly penciled in three interest-rate cuts in forecasts published last month, but investors are now betting on just one to two cuts this year, futures markets show. The Federal Open Market Committee, the group of officials that sets interest rates, next meets April 30-May 1. “Their confidence has been shaken,” said Kathy Bostjancic, chief economist at Nationwide Mutual Insurance. “He confirmed and emphasised what the markets were already pricing in based on the economic data.
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