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Powell Says Inflation Has Been Higher Than Thought and Expects Rates to Hold Steady


Federal Reserve Chair Jerome Powell listens as U.S. Secretary of the Treasury Janet Yellen presides over a meeting of the Financial Stability Oversight Council at the Treasury Department on May 10, 2024 in Washington, DC. 

Kent Nishimura | Getty Images

Federal Reserve Chair Jerome Powell reiterated Tuesday that inflation is falling more slowly than expected and will keep the central bank on hold for an extended period.

Speaking to the annual general meeting of the Foreign Bankers’ Association in Amsterdam, the central bank leader noted that the rapid disinflation that happened in 2023 has slowed considerably this year and caused a rethink of where policy is headed.

“We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected,” Powell said. “What that has told us is that we’ll need to be patient and let restrictive policy do its work.”

While he expects inflation to come down through the year, he noted that hasn’t happened so far.

“I do think it’s really a question of keeping policy at the current rate for longer than had been thought,” he said.

However, he also repeated that he does not expect the Fed to be raising rates.

“I don’t think that it’s likely, based on the data that we have, that that the next move that we make would be a rate hike,” he said. “I think it’s more likely that we’ll be at a place where we hold the policy rate where it is.”

This is breaking news. Please check back for updates.



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