US Fed in no hurry to cut interest rates: Chair

ISTANBUL

The US Federal Reserve is in no hurry to adjust its policy stance, Fed Chair Jerome Powell told a congressional committee on Tuesday.

"With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance," he told the Senate’s Banking, Housing, and Urban Affairs Committee.

Powell said labor market conditions have cooled but remain robust, while inflation is very close to the long-term 2% target but still remains slightly elevated.

Saying the Federal Open Market Committee (FOMC) has cut the policy rate by 100 basis points since last September, Powell said this readjustment of the policy stance is appropriate in light of the progress made in curbing inflation and the cooling in the labor market, and that they continue to reduce their securities holdings.

"We know that reducing policy restraint too fast or too much could hinder progress on inflation. At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the FOMC will assess incoming data, the evolving outlook, and the balance of risks," he added.

Saying that they will evaluate incoming data, the evolving outlook, and the balance of risks when assessing the scope and timing of additional adjustments to the policy rate, Powell added: "If the economy remains strong and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly."