Federal Reserve Chairman Jerome Powell on Wednesday strongly opposed the idea that the central bank might cut interest rates in the spring, as many market participants expected.
He said: I do not think it is likely that the committee will reach a level of confidence by the March meeting to cut interest rates, but let’s see, this came during his speech at a press conference following the first Fed meeting of 2024.
The statement came at a press conference after the Federal Reserve's January meeting, where the central bank left its benchmark interest rate unchanged. Powell said earlier in the press conference that interest rate cuts are likely to come sometime this year.
Stocks fell to session lows after Powell's March comment, as the Fed chair dashed the hopes of traders who want the central bank to cut interest rates sooner before a recession hits. The Dow Jones Industrial Average lost as much as 250 points at one point.
The next two dates for the central bank's policy decision are scheduled for March 20 and May 1. In recent months, Wall Street traders and strategists have focused on these two dates as candidates for the first rate cut, as inflation continues to decline and job growth slows.
Powell also refused to commit to a series of interest rate cuts once the Fed makes its first move, saying it will depend on the data.
