READY TO GET I-RATE?

No cuts now: Fed

The Federal Reserve kept decades-high interest rates unchanged following its meeting on Wednesday — but affirmed that it still anticipates making three cuts this year.

Chair Jerome Powell (inset) said recent high inflation readings had not changed the under- lying “story” of slowly easing price pressures, but added that data also had not bolstered the central bank’s confidence that the inflation battle has been won.

Speaking after the twoday policy meeting, Powell said the timing of the muchanticipated reductions still depended on officials becoming more secure that inflation can continue to decline towards the Fed’s 2% target in an economy that continues to outperform expectations.

Investors, are betting that the cuts will begin in June.

Stocks extended their gains following the release of the Federal Open Market Committee’s policy statement, with all three indexes hitting new highs. The Dow jumped 401.37 points, or 1%, to close at 39.512.13. The S&P gained 0.9% to break above 5,200 for the first time, while the Nasdaq surged 202.62, or 1.3%, to end the day at 16.369.41.

Inflation reports at the beginning of the year showed price pressures remained “elevated,” in the Fed’s view, but “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road to 2%,” Powell told reporters.

The decision on when to cut rates will depend on more data, Powell said, to determine if the disappointing readings that started the year continue.

“We want to be careful,” the Fed chief said, reiterating a go-slow approach to rate cuts that has been buttressed by the economy’s ongoing strength, leaving officials in no rush to ease monetary policy while the economy and the job market continue to grow.

While officials affirmed their view for three rate cuts this year, they also upgraded their outlook for economic growth and projected slightly slower progress on inflation this year.

The updated quarterly economic projections showed the personal consumption expenditures price index excluding food and energy rising at a 2.6% rate by the end of the year, compared with 2.4% in the projections issued in December.

Nevertheless, 10 of the Fed’s 19 officials still see the policy rate falling by at least three-quarters of a percentage point by the end of this year.