Powell Says It's Likely To Take Longer To Achieve Confidence Inflation Is Slowing

(RTTNews) - Citing a "lack of progress" toward reaching the central bank's inflation goal, Federal Reserve Chair Jerome Powell suggested on Tuesday that interest rates are likely to remain higher for longer.

Powell's remarks came during a moderated discussion with Bank of Canada Governor Tiff Macklem at the Washington Forum on the Canadian Economy.

"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 percent inflation goal," Powell said.

Fed officials, including Powell, have repeatedly stated they need "greater confidence" inflation is slowing before they consider cutting interest rates.

"The recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence," Powell said. "That said, we think policy is well positioned to handle the risks that we face."

The Fed chief's remarks come as recent data showing sticky inflation along with continued economic strength have led to reduced expectations of a rate cut in June.

According to CME Group's FedWatch Tool, the chances of a 25 basis point rate cut in June have tumbled to 15.0 percent compared to 56.1 percent just a week ago.