Fed Chair Powell says rate cuts not in the base case as Federal Reserve raises rates
Federal Reserve Chair Jerome Powell took questions after announcing a 25 basis points increase in interest rates.
When asked about financial conditions and whether a credit tightening would warrant a rate cut, Powell responded that financial conditions seemed to have tightened beyond traditional indexes and that there were other measures that showed some tightening in bank lending conditions.
However, rate cuts were not in the base case for the Federal Reserve, and the extent and duration of the tightening would need to be assessed before any policy decisions were made.
Powell also stated that there had been no discussion about changing the implementation of the balance sheet runoff at this time.
