Two Fed officials send rate cut message: Not anytime soon

Two senior Fed officials conveyed the message Thursday that the U.S. central bank is on track to cut interest rates this year, but they emphasized that won’t happen anytime soon. Fed Vice Chairman Philip Jefferson and Governor Lisa Cook said they were optimistic that inflation was still slowing despite the January decline, but made clear they wanted more evidence that inflation had returned to the 2% target before they lowered borrowing costs. “At some point, as confidence grows that disinflation is continuing and sustainable, the changing landscape will warrant a change in the policy rate,” Cook said at an event at Princeton University. Jefferson acknowledged that rate cuts are likely this year but said officials should be careful not to cut rates too far in response to easing price pressures. “Excessive easing could stall or reverse progress in restoring price stability,” he said in a speech at the Peterson Institute for International Economics.