Fed Chair Powell: Inflation Has Cooled, But Fed Rate Cuts Uncertain
CPI Shows Easing Inflation, But Fed Rate Policy Outlook Unclear
Inflation has come a long way since peaking two years ago, but the Federal Reserve is still uncertain about the future of interest rates.
Federal Reserve Chair Jerome Powell said Tuesday that inflation has "come a long way" since reaching a four-decade peak two years ago. However, he also said that the Fed is still "not there yet" in terms of bringing inflation down to its target of 2%.
Powell's comments came after the release of the latest consumer price index (CPI) data, which showed that inflation eased last month. The CPI is a closely watched measure of inflation that measures the average change over time in the prices people pay for goods and services, including fuel, utilities, and food.
The CPI rose by 0.1% in November, compared to a 0.4% increase in October. The annual inflation rate, as measured by the CPI, fell to 3.3% in November, down from 3.7% in October. This is the lowest annual inflation rate since September 2021.
The release of the CPI data boosted the likelihood of Fed policymakers projecting two rate cuts for 2024 when they release their updated economic projections next week. However, Powell cautioned that the Fed is still "data-dependent" and that it will continue to make decisions based on the latest economic data.
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