Fed Says Rate Cuts Possible This Year If Inflation Continues Slow Progress Toward 2% Target

Inflation has fallen sharply from over 9% to about 3% near the Fed's 2% target, but more progress is still needed before rate cuts.

The Fed wants more evidence that inflation is moving sustainably to 2% before cutting rates, to avoid halting progress or setting off inflation again.

Nearly all Fed policymakers believe rate cuts will likely be appropriate this year if good inflation data continues.

Powell admitted being too slow to recognize persistent inflation in 2021, but tightening policy since then has been critical to bringing inflation down.

The Fed remains confident it can manage risks from issues like lower commercial real estate values, while unsustainable government debt is a long-term worry.