by Howard Schneider
WASHINGTON (Reuters) – The Federal Reserve (Fed) can be “cautious” in deciding when to cut interest rates, while the strength of the economy gives central bankers time to be certain that inflation will continue to fall, declared the president of the American central bank in an interview broadcast Sunday evening by CBS.
“The prudent thing to do (…) is just to give ourselves time to see if the data confirms that inflation is falling towards 2% in a sustainable way,” Jerome Powell said on the show ’60 Minutes’ .
“We want to approach this issue with caution,” he added, repeating comments made Wednesday at a press conference following the publication of the Fed press release, which left its rates unchanged for the fourth meeting consecutive.
Jerome Powell said less strain in the labor market could prompt the Fed to act more quickly, while data showing that inflation has stopped declining could result in a rate cut being postponed.
“We have to take the risk of acting too quickly … or too late,” he said, stressing that Fed officials believed “the economy is in a good place.”
This interview was recorded on February 1, on the eve of the monthly employment report which showed a stronger than expected increase in salaries and positions – an element likely to encourage waiting longer before reducing the rate.
(Reporting Howard Schneider; French version Jean Terzian)
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