Fed needs more time to be confident of inflation reaching its target before lowering rates: Chairman

By Ovunc Kutlu

ISTANBUL (AA) - The US Federal Reserve needs more time to gain confidence that inflation will return to its 2% target before starting to lower interest rates, Chairman Jerome Powell said Tuesday.

"The recent (macroeconomic) data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence," he told a forum on US-Canada economic relations.

"We can maintain the current level of restriction for as long as needed," he noted.

Consumer inflation in the US annually rose 3.5% in March and monthly gained 0.4%, both coming in above market expectations, according to figures released last week.

"More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal," said Powell.

The Fed skipped an interest rate hike in March, as widely expected, and kept its federal funds rate unchanged between the 5.25% - 5.5% target range.

The US central bank's next two-day meeting will conclude on May 1 and it is widely expected to keep the federal funds rate unchanged.