Fed says it's not ready to cut rates until 'greater confidence' inflation is moving to 2% goal
What is the Federal Reserve's inflation goal?
The Federal Reserve's inflation goal is to maintain a 2% annual inflation rate, as measured by the annual change in the price index for personal consumption expenditures5. This target is considered to be most consistent with the Federal Reserve's mandate for maximum employment and price stability.
Why did Fed officials hesitate to lower interest rates?
Fed officials hesitated to lower interest rates because they wanted greater confidence that inflation was moving sustainably towards their 2% target. They agreed that more favorable data was required before considering rate cuts, emphasizing the need for a cautious approach to avoid a resurgence in inflation.
What data do Fed officials need to cut rates?
Fed officials need additional favorable data on inflation moving sustainably towards their 2% target to gain greater confidence before cutting rates. They are looking for more evidence that the recent improvements in inflation data will continue in the future.