Powell: I'm not ready to say inflation is low enough

US Federal Reserve (Fed) Chairman Jerome Powell stated that he has “some confidence” that inflation is trending down but is “not yet ready” to say that he is confident enough that it has fallen to 2 percent sustainably. Powell answered questions from members of the US House of Representatives Financial Services Committee on the second day of his presentation of the semiannual Monetary Policy Report in the US Congress. When asked whether the decision to cut interest rates would be made upon reaching a specific target in inflation or based on the general trend of the inflation rate, Powell noted that they take into account all of the data and that there is no specific figure that needs to be reached. When asked, “Are you confident that inflation is trending down?” Powell said, “I have some confidence in that.” The Fed Chairman said, “The question is, are we confident enough that it has fallen to 2 percent sustainably? I’m not ready to say that yet.” Pointing out that the latest readings are showing progress, Powell reiterated that more good data would strengthen confidence that inflation has fallen to the 2 percent target. Powell also answered questions about the Fed’s balance sheet, stating that the bank has already reduced its balance sheet size by approximately $1.7 trillion. Noting that they have “made considerable progress” in reducing the size of the balance sheet, Powell said, “We think we still have a ways to go.” Fed Chair Powell attended a hearing held in the US Senate Banking, Housing and Urban Affairs Committee on the first day of his presentation of the semiannual Monetary Policy Report in the US Congress. Powell stated that the data for the first quarter of this year did not support confidence in reducing interest rates, and indicated that they were looking for “more good data” for the rate cut.