Federal Reserve officials will likely reduce their benchmark interest rate later this year, Chair Jerome Powell said Wednesday, despite recent reports showing that the U.S. economy is still strong and that U.S. inflation picked up in January and February.
In his speech, Powell also sought to dispel any notion that the Fed’s interest-rate decisions might be affected by this year’s presidential election. The Fed will meet and decide whether to cut rates during the peak of the presidential campaign, in July and September. Many economists now predict that the central bank’s first rate cut won’t come until July or even later. That expectation has fueled some speculation on Wall Street that the Fed might end up deciding to delay rate cuts until after the presidential election. The Fed’s November meeting will take place Nov. 6-7, immediately after Election Day.