Federal Reserve's Stance on Rate Cuts

Federal Reserve Chair Jerome Powell made it clear on Wednesday that the central bank is not considering any rate cuts until there is substantial progress on inflation or noticeable weakness in the labor market. This statement underscores the Fed's commitment to achieving its dual mandate of stable prices and maximum employment.

Economic Progress Towards Goals

Powell highlighted that the economy is moving towards the Fed's 2% inflation target and striving for maximum employment. He addressed the recent decision to omit the reference to inflation progress from the Fed's statement, clarifying that this change was not intended to send any specific signal to the market.

Labor Market Stability and Policy Positioning

The Fed Chair also pointed out that labor market conditions have remained mostly stable over the last six months, indicating that the current policy stance is well-positioned. While acknowledging the positive inflation reports for November and December as two consecutive "good readings," Powell cautioned against overinterpreting these results.