A rate cut could come later this year, according to Investing.com

Investing.com – After the Federal Reserve’s decision, markets turned to Jerome Powell’s speech that provided some details on the Fed’s vision for its monetary policy. He began by noting that the Fed is focused on its mandates.

Powell said the job market is strong but inflation is high and the Bank will need to continue to take the necessary steps to get inflation back to 2%.

He noted that the central bank will cut rates later in the year if conditions permit. However, the change should come at the right time so that the results achieved so far are not affected.

Powell stressed that cutting rates too quickly could undo efforts to bring inflation under control. On the other hand, a reduction done too late can have an extremely negative impact on the economy.

However, the central bank may review its actions if the job market weakens rapidly. However, the possibility of keeping rates high for a long time is not ruled out.

The Fed expects rent growth to continue to slow, which should help return inflation to desired levels. Powell mentioned that rates will not return to very low levels like before.

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