Target inflation still long way off despite promising signs: Powell

Federal Reserve Chairman Jerome Powell said that the central bank's efforts to return inflation to the 2% target are not over yet, although price pressures are showing signs of abating.

“Inflation has moderated somewhat since the middle of last year, and longer-term inflation expectations appear to remain well anchored,” Powell said in a press conference after the end of a two-day policy meeting, at which the central bank kept the interest rates unchanged.

Nevertheless, the process of getting inflation sustainably down to 2 percent has a long way to go, he added.

"We want to see really convincing evidence that we have reached the appropriate level, and while we are seeing progress, and we welcome that, we need to see more progress before we are ready to reach that conclusion," the Fed Chair said.

Powell noted that the expectation of fewer rate cuts in 2024 has more to do with Fed officials' optimism about economic growth than growing concern about stubborn inflation.

“In general, stronger activity means that we have to do more on interest rates, and that is what this meeting tells you,” he said.