Jerome Powell recently gave an interview with CBS’s 60 Minutes covering a range of topics from commercial real estate to geopolitical risks to rate cuts. He reaffirmed that the economy is currently in a good place and progress has been made on bringing inflation down, but the job is not quite done yet. The Federal Open Market Committee (FOMC) still wants to see more good data, but it expects to “dial back the restrictive stance by cutting rates this year”—just not in March as the market expected, since “it's not likely that this committee will reach that level of confidence in time.”
Turning to China, Powell acknowledged that the country’s economy is currently facing a myriad of challenges: slowing growth, continued issues around commercial real estate, and an apparent pivot from a market-led growth model to state-owned enterprises. However, he notes that “our financial system is not deeply intertwined with theirs,” which means that the “implications for the United States—we may feel them a bit, but they shouldn’t be that large.”
In short, absent any unforeseen events, the Fed seems to be on a prudent path for rate cuts. When asked about the December Fed projections, which had forecast rates of around 4.6% by the end of 2024, Powell continued to support them: “nothing has happened in the meantime that would lead me to think that people would dramatically change their forecasts.”
Maverick Lin contributed to this article.