LRHC

By Greg Robb

Fed is committed to getting inflation back to 2%, Fed chair says

Federal Reserve Chair Jerome Powell and his colleagues have penciled in one rate cut for 2026

The risks to the U.S. economy suggest that interest rates may need to be lower or higher, Federal Reserve Chair Jerome Powell said Monday.

In a talk at Harvard University, Powell said that there's "sort of downside risk to the labor market, which suggests keep rate low - but there's upside risks to inflation, which suggests maybe don't keep rates low."

Powell said the Fed is committed to getting inflation back to 2%. The Fed's favored measure of inflation has been above 2% since 2021.

Powell said the Fed isn't facing an imminent decision on what to do with rates because "we don't know what the economic effects" of the Iran war will be.

At its meeting in mid-March, the Fed's dot plot pointed to one rate cut this year. The Fed's statement also pointed to the next move being a cut.

A minority of officials pressed for the statement to say that rates could go up or down.

-Greg Robb

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03-30-26 1056ET