Federal Chair Jerome Powell repeated on Wednesday that he doesn't expect "that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2%."
Consistent with his prior comments, he expects it will be appropriate to start lowering its key interest rate later this year.
Core inflation stood at 2.8% in February, down from 4.8% a year earlier, indicating the Fed's mission to drive down inflation to its 2% goal is not yet done, he said at Stanford Business School's first Business, Government, and Society Forum.
The strength of the U.S. economy gives the central bankers time to let incoming data guide the Federal Open Market's policy decisions, another point he has made before.
The Federal Reserve doesn't seek to be climate policymakers, he said.
12:33 PM ET: "Our economy has been short labor, and it probably still is… we have needed more people," Powell said. Immigration has increased significantly over the last two years. Part of the recent strong GDP growth is that more people are working.
12:30 PM ET: Because of the unusual origins of this inflation, Powell said he always thought there was a path to bringing inflation down to 2% without severe damage to the economy. "I always thought something like that was possible, and it appears to be happening."
12:27 PM ET: Inflation expectations are consistent with inflation returning to 2%, and that's "reassuring," Powell said.
Updated at 12:23 PM ET: During the pandemic, supply-side shocks and a reduced labor force were responsible for the inflation that followed in 2021 and 2022, Powell said. Inflation didn't come just from overheated demand. Supply chain healing and people coming back into the labor force have helped lower the rate of inflation. "There may be more supply-side gains to be had," he said.
