Powell reiterates 'no rate cut now' in CBS 60 Minutes interview

Federal Reserve Chairman Jerome Powell said that while the economy is strong and inflation is falling, the central bank is unlikely to cut interest rates anytime soon. In an interview with CBS's "60 Minutes" on Thursday, Powell reiterated his position that the Fed needs to be "cautious" about why it is not cutting rates now. As the economy continues to grow and the labor market remains strong, the Fed will be "cautious about when to cut rates," he said.

This was not a major departure from the press conference following the Fed's decision to hold rates last week. The interview took place on Feb. 1, one day after the Fed's Jan. 30-31 meeting, when it left rates unchanged. Powell's last appearance on CBS's 60 Minutes was in 2021, when he discussed the economy's recovery from the recession triggered by the COVID-19 pandemic.

In the interview, he addressed the risk of inflation returning if interest rates are lowered too quickly. "If (the Fed's rate cuts) move too quickly, inflation is more likely to stabilize well above the 2 percent objective," Powell said. But he also noted the risk that moving too late could weigh on economic activity and the labor market, leading to a possible recession. The Fed's goal is to get inflation down to 2%, but Powell said he wouldn't wait until then to cut rates. "I just want to see more good data," he said, adding, "It doesn't have to be better than what we've seen, it doesn't even have to be better. It just has to be good." Powell went on to note that "we have to balance two risks" and that "there is no easy, simple, clear path."

The first rate cut will most likely come in the middle of this year, just a few months before the November elections. However, Powell emphasized that he does not take politics into account when making rate decisions.