Fed Chair Powell Acknowledges Inflation Is a Little Higher Than Expected

Jerome H.Powell, the chair of the Federal Reserve, said that the central bank could be “more cautious” as it cuts interest rates at a moment when the economy was growing strongly and price increases had been slightly sticky.“Growth is definitely stronger than we thought, and inflation is coming a little higher,” Mr.

Powell said at The New York Times’s DealBook Conference on Wednesday.“The good news is that we can afford to be a little more cautious as we try to find neutral.”Mr.

Powell did not comment directly on whether the Fed would cut rates at the central bank’s upcoming Dec.17-18 meeting.

But the Fed chair’s comments underscore the complicated moment facing the Fed.The American economy has been growing at a surprisingly strong pace in recent months, fueled by consumers who are now spending robustly heading into the holiday season.The job market has slowed without grinding to a halt, wage growth remains solid, and productivity has been showing signs of meaningful improvement.That combination is great news for policymakers and everyday workers alike — it means that America has managed to avert a painful recession that was once seen as all but guaranteed as the Fed lifted interest rates sharply in 2022 and 2023 to wrestle inflation under control.But the economy’s resilience also makes the Fed’s next steps trickier.The central bank began to cut interest rates in September in response to steadily cooling inflation, and its officials forecast that they would continue to lower them both this year and into 2025.

But at the time, unemployment was ticking up and the economy seemed to be cooling.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all o...