Powell Signals Potential Rate Cuts, Urges Caution Amid Inflation Concerns

Federal Reserve Chair Jerome Powell emphasizes data dependence and the need for careful consideration before reducing interest rates, amidst a politically charged debate over monetary policy.

Federal Reserve Chair Jerome Powell reassures investors of potential rate cuts this year, aiming for a soft landing by controlling inflation without causing economic contraction.
Powell's testimony to Congress highlights a partisan divide over rate cuts ahead of the 2024 election, with Democrats pushing for reductions to ease borrowing costs and Republicans cautioning against premature actions.
Despite expectations of rate cuts, Powell emphasizes the need for caution and data dependence, warning against cutting rates too soon or too much.
Bond market remains cautious as upcoming employment and consumer price data could influence the Fed's rate decisions, with fears of reigniting inflation.
Powell reiterates the Fed's stance of not rushing into rate cuts until there is more confidence that inflation is moving sustainably toward the 2% target.