Editor’s Note: On Feb. 1, 2024, Scott Pelley, a correspondent for 60 Minutes, conducted an interview with Jerome Powell, the Chair of the Federal Reserve, at the Federal Reserve headquarters in Washington, D.C. The interview aired on 60 Minutes on Feb. 4, 2024.
In the interview, Scott Pelley asked Jerome Powell about the status of inflation, to which Powell acknowledged the decrease in inflation over the past year but emphasized the importance of fully restoring price stability. Powell highlighted the strong economy, solid growth, and low unemployment rate as reasons for not rushing to cut interest rates despite the declining inflation.
Powell expressed the need for more evidence of sustainable inflation reduction to 2% before considering rate cuts. He mentioned the importance of carefully weighing the risks of moving too soon or too late, considering factors like labor market weakness and persistent inflation.
Regarding the timing of rate cuts, Powell indicated that it would depend on incoming data and the balance of risks. He explained the dangers of moving too soon or too late, emphasizing the need for caution in decision-making to avoid adverse effects on economic activity and the labor market.
When discussing the Federal Reserve’s commitment to returning inflation to 2%, Powell clarified that they wouldn’t wait to reach 2% before considering rate cuts. He expressed confidence in the progress towards the target and the likelihood of reducing rates based on current inflation trends.
Powell also addressed concerns about high prices and inflation, noting that while some prices might decline, the overall price level tends to remain stable. He acknowledged the dissatisfaction caused by high prices for basic necessities and emphasized the goal of achieving sustainable inflation levels.
In response to questions about potential rate cuts in upcoming meetings, Powell mentioned that while the economy was strong, the decision to cut rates would depend on evolving economic conditions. He highlighted the consensus among Federal Open Market Committee participants regarding the potential for rate cuts in the future.
Pelley questioned Powell about the impact of government spending on the economy and the importance of fiscal sustainability. Powell acknowledged the unsustainable fiscal path and stressed the need for a return to fiscal responsibility to avoid burdening future generations.
Regarding the global economy, Powell highlighted geopolitical risks as a significant concern and emphasized the importance of American leadership in supporting democracy and economic stability worldwide. He expressed cautious optimism about the global economy’s outlook while acknowledging the risks posed by geopolitical tensions.
In conclusion, Powell emphasized the importance of making informed decisions based on real-time data and the need for continuous vigilance in monitoring economic trends. He underscored the Federal Reserve’s commitment to fostering economic stability and prosperity through prudent policy decisions and effective risk management strategies.
