by Howard Schneider
WASHINGTON (Reuters) – Federal Reserve Chairman Jerome Powell said on Thursday that the U.S. central bank was “well aware” of the risks its restrictive monetary policy posed to the economy but reiterated that any cut in interest rates he interest would depend on the evolution of the economy, in particular a continued slowdown in inflation.
Hearing before the Senate Banking Committee, Jerome Powell was responding to a question from Ohio Democratic Senator Sherrod Brown, who asked the central banker to explain why the Fed had not been quicker to cut rates “to prevent workers from losing their jobs.
“We are of course well aware of this risk and very keen to avoid it,” said Jerome Powell. “If what we expect and what we see – continued strong growth, a strong labor market … progress in reducing inflation – if the economy is moving in that direction, then we think that the cautious easing of our restrictive policy (…) can and will begin during this year.”
Jerome Powell had already spoken the day before during a hearing before the Financial Services Committee of the House of Representatives, during which he affirmed that the Fed could lower rates “at some point this year” if the The American economy is developing as expected.
(Reporting by Howard Schneider; Blandine Hénault for the French version, editing by Sophie Louet)
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