A “60 Minutes” correspondent in a segment aired Sunday voiced over some of Federal Reserve Chair Jerome Powell’s comments about future interest rates, injecting uncertainty into the market.
Scott Pelley, in an interview with Powell, included only some comments the Fed chair made, indicating that it is not likely that the Federal Open Market Committee (FOMC) will cut its federal funds rate at its March meeting, excluding comments about current predictions for the rest of the year. The Dow Jones Industrial Average dropped more than 1% in just the first few hours of trading on Monday amid the uncertainty. (RELATED: Full-Time Work Is Being Replaced By Part-Time Jobs As Americans And Businesses Struggle)
“We’ve said that we want to be more confident that inflation is moving down to 2%,” Powell said in the interview before Pelley began the voiceover. “And I would say, and I did say yesterday, that I think it’s not likely that this committee will reach that level of confidence in time for the March meeting, which is in seven weeks.”
Pelley, in the voiceover, said, “The next committee vote then would be in May.” Amid the voiceover, the transcript of the interview shows Powell predicting rate cuts before the end of the year.
1 Strange 60 minute interview. Why would forward guidance be done in a voice over by a reporter who does not understand the nuance of monetary policy? Not sure the voice over was accurate, so it only increased uncertainty while taking March off the table.
— Eric Rosengren (@EricSRosengren) February 5, 2024
“So, I would say that’s not the most likely or base case,” Powell said in the transcript. “However, all but a couple of our participants do believe it will be appropriate to, for us to begin to dial back the restrictive stance by cutting rates this year. And so, it is certainly the base case that, that we will do that. We’re just trying to pick the right time, given the overall context.”
The interview follows the conclusion of the January FOMC meeting, where members elected not to change the federal funds rate, which sits in a range of 5.25% and 5.50%, the highest point in 22 years. The rate was set at that level to combat high inflation, which peaked at 9.1% in June 2022, far higher than the Fed’s 2% target.
Investors and analysts are increasingly optimistic about the Fed cutting rates in the near future, possibly providing relief to many businesses that are being affected by the increased cost of credit, stifling economic growth. In a December estimate, FOMC members projected that rates would be lowered to 4.6% by the end of the year, indicating possibly three rate cuts.
CBS did not immediately respond to a request for comment from the Daily Caller News Foundation.
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