Cutting rates too soon could be 'quite disruptive': Powell
The US central bank has held interest rates at a 23-year high of between 5.25 and 5.50% as it seeks to bring inflation firmly down to its long-term target of two percent.
Washington: The 's high benchmark rate is "doing its job" against elevated , chairman said Wednesday, warning that lowering it too soon could be "quite disruptive" for the American economy.The US central bank has held at a 23-year high of between 5.25 and 5.50% as it seeks to bring inflation firmly down to its long-term target of two percent.
Last month, Fed policymakers penciled in three for this year, staying the course despite a recent uptick in inflation which has disrupted recent progress against rising prices.
Powell told a conference in California that the current risks to the US economy were "two-sided," with negative consequences for the economy if policymakers moved to cut rates too fast or too slow.
"The risk, though, of moving too soon, really is.. that inflation does move up," he said, adding it "would be quite disruptive if we were to have to then come back in."
But if the US economy continues to evolve as expected, most Fed participants still expect it will be "appropriate to begin lowering the at some point this year," he said.
Source: Stocks-Markets-Economic Times
