Federal Reserve Chairman Jerome Powell said on Tuesday that talk of cutting interest rates was “premature” and that further increases could still be needed.
“It’s premature to be talking about cutting interest rates and I don’t think there’s any need to be worrying about that at this point in time,” Powell told the House Financial Services Committee.
Powell said that the current rate environment – with the fed funds rate at between 1.75% and 2% – is “almost neutral,” allowing rates to move either up or down.
“It is our view that monetary policy remains accommodative and that there could be further policy firming if needed,” he said.
The Fed has hiked rates several times since the beginning of 2017 to keep inflation in check. However, the pace of rate hikes has slowed considerably since late 2018 amid global economic uncertainty.
Powell noted that while the economy is currently performing well, it could still face risks from trade tensions, Brexit and geopolitical issues. He said it was too soon to rule out the possibility of future rate hikes.
The Fed is expected to assess economic data and assess the outlook before deciding whether to hike or cut rates.
