Fed rate cuts to be hard this year? … Inflation target 2%
Fed rate cuts to be hard?… Inflation target 2% "Fed needs to be confident of reaching its 2% Inflation target." For the U.S. Federal Reserve to cut interest rates, it first needs to have strong confidence in reaching and maintaining its 2% inflation target. Over the past year, inflation has been falling steadily, but not enough to reach the target, and the economy is showing signs of improvement. The question for the Fed is. If it cuts rates too soon, it will fail to reach its 2% inflation target and potentially cause high inflation to become entrenched. If they cut rates too late, high-interest rates could push the economy into recession. Fed Chairman Jerome Powell's comments echo that concern. “Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2%.”, “At the same time, reducing policy restraint too late or too little could unduly weaken econom