Powell tells lawmakers interest rate cuts are likely this year [Video]

Federal Reserve Chair Jerome Powell reinforced his belief Wednesday that the central bank will cut its key interest rate this year, but said it first wants to see more evidence that inflation is falling sustainably back to the Fed’s 2% target.

Powell’s comments to a House committee largely echoed those he made at a news conference Jan. 31. Since then, however, government reports have shown that inflation picked up from December to January, and hiring accelerated. Those signs suggested that the economy remains hot and that the process of further slowing inflation will likely be uneven from month to month.

But Powell did not express concern about the inflation data. Instead, he noted that according to the Fed’s preferred gauge, inflation “has eased notably over the past year” even though it remains above the central bank’s target.

On the first of his two days of semiannual testimony to Congress, Powell …