Fed Chair Powell dismisses rate cut speculation, hints at potential rate hikes

Federal Reserve Chairman Jerome Powell stated that it is premature to discuss cutting interest rates and that the Federal Open Market Committee plans to maintain a restrictive policy until inflation is solidly back at 2%. Powell acknowledged that policy is already in restrictive territory but emphasized the need to carefully assess the risks of under- and over-tightening. The markets reacted positively to his remarks, with major averages rising and Treasury yields falling. Powell's comments suggest that the Fed may be done hiking rates and could potentially move towards an easing posture in 2024. However, he emphasized that future decisions will be data-dependent and that the Fed will continue to monitor economic activity and inflation.