Powell Hints Fed Won’t Lower Interest Rates Until Late This Year

The Federal Reserve isn’t quite ready to lower interest rates.

During a panel discussion Tuesday at the Wilson Center in Washington, D.C., Fed Chairman Jerome Powell said that continued inflation increases mean the central bank would likely delay any interest rate cuts until late this year. 

“Recent data have clearly not given us greater confidence” that inflation is fully under control and “instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said to the panel. 

Powell’s shifted stance on rate cuts comes about a month after he told a Senate committee in early March that the Fed was “not far” from cutting rates. Although the economy is growing at record levels, inflation stubbornly rose to 3.5 percent in March, up from 3.2 percent in February. Both are well above the Fed’s goal of 2 percent annual inflation.

Much of that inflation is driven by rising fuel and food costs. Prices climbed 0.4 percent last month, the same as in February, according to a recent monthly report by the U.S. Bureau of Labor Statistics. 

A spokesperson for the Federal Reserve declined to comment further.

The commercial real estate industry has been waiting for the Fed to cut interest rates and any delay could cause more distress in the market, leading to more assets being sold instead of refinanced. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.