WASHINGTON (AP) — Federal Reserve Chair Jerome Powell cautioned Tuesday that persistently elevated inflation will likely delay any Fed interest rate cuts until later this year, opening the door to a period of higher-for-longer rates.
“Recent data have clearly not given us greater confidence" that inflation is coming fully under control and "instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said during a panel discussion at the Wilson Center.
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WASHINGTON (AP) — Federal Reserve Chair Jerome Powell cautioned Tuesday that persistently elevated inflation will likely delay any Fed interest rate cuts until later this year, opening the door to a period of higher-for-longer rates.
Tiff Macklem, Governor of the Bank of Canada, participates in a Washington Forum on the Canadian Economy, together with Federal Reserve Chair Jerome Powell, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Federal Reserve Chair Jerome Powell leaves the stage at the conclusion of a Washington Forum on the Canadian Economy, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Federal Reserve Chair Jerome Powell participates in a Washington Forum on the Canadian Economy, together with Tiff Macklem, Governor of the Bank of Canada, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Federal Reserve Chair Jerome Powell participates in a Washington Forum on the Canadian Economy, together with Tiff Macklem, Governor of the Bank of Canada, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
“If higher inflation does persist," he said, “we can maintain the current level of (interest rates) for as long as needed.”
The Fed chair's comments suggested that without further evidence that inflation is falling, the central bank may carry out fewer than the three quarter-point reductions its officials had forecast during their most recent meeting in March.
His remarks Tuesday represented a shift for Powell, who on March 7 had told a Senate committee that the Fed was “not far” from gaining the confidence it needed to cut rates. At a news conference on March 20, Powell appeared to downplay that assertion. But his comments Tuesday went further in dimming the likelihood of any rate cuts in the coming months.
“Powell’s comments make it clear the Fed is now looking past June,” when many economists had previously expected rate cuts to begin, Krishna Guha, an analyst at EvercoreISI, said in a research note.
In the past several weeks, government data has shown that inflation remains stubbornly above the Fed's 2% target and that the economy is still growing robustly. Year-over-year inflation rose to 3.5% in March, from 3.2% in February. And a closely watched gauge of “core” prices, which exclude volatile food and energy, rose sharply for a third straight month.
As recently as December, Wall Street traders had priced in as many as six quarter-point rate cuts this year. Now they foresee only two rate cuts, with the first coming in September.
Powell's comments followed a speech earlier Tuesday by Fed Vice Chair Philip Jefferson, who also appeared to raise the prospect that the Fed would not carry out three cuts this year in its benchmark rate. The Fed's rate stands at a 23-year high of 5.3% after 11 rate hikes beginning two years ago.
Jefferson said he expected inflation to continue to slow this year with the Fed’s key rate “held steady at its current level.” But he omitted a reference to the likelihood of future rate cuts that he had included in a speech in February.
Last month, Jefferson had said that should inflation keep slowing, “it will likely be appropriate” for the Fed to cut rates “at some point this year” — language that Powell has also used. Yet neither Powell or Jefferson made any similar reference Tuesday.
Instead, Powell said only that the Fed could reduce rates “should the labor market unexpectedly weaken.”
Fed officials have responded to recent reports that the economy remains strong and inflation is undesirably high by underscoring that they see little urgency to reduce their benchmark rate anytime soon.
On Monday, the government reported that retail sales jumped last month, the latest sign that robust job growth and higher stock prices and home values are fueling solid household spending. Vigorous consumer spending can keep inflation elevated because it can lead some businesses to charge more, knowing that many people are able to pay higher prices.
Tiff Macklem, Governor of the Bank of Canada, participates in a Washington Forum on the Canadian Economy, together with Federal Reserve Chair Jerome Powell, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Tiff Macklem, Governor of the Bank of Canada, participates in a Washington Forum on the Canadian Economy, together with Federal Reserve Chair Jerome Powell, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Federal Reserve Chair Jerome Powell leaves the stage at the conclusion of a Washington Forum on the Canadian Economy, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Federal Reserve Chair Jerome Powell participates in a Washington Forum on the Canadian Economy, together with Tiff Macklem, Governor of the Bank of Canada, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
Federal Reserve Chair Jerome Powell participates in a Washington Forum on the Canadian Economy, together with Tiff Macklem, Governor of the Bank of Canada, Wednesday, April 16, 2025, in Washington. (AP Photo/Manuel Balce Ceneta)
MADRID (AP) — After spending more than three hours on the court and earning a hard-fought victory, Rafael Nadal was feeling optimistic again.
Nadal's body withstood its toughest test yet at the Madrid Open as he needed three sets to get past 91st-ranked Pedro Cachin on Monday.
Nadal didn't show any signs of physical limitations as he won 6-1, 6-7 (5), 6-3 to make it to the round of 16 at the clay-court tournament where he is the record five-time champion.
“It’s positive, now I don’t feel that something went wrong on my body, but I need to wait until tomorrow, being 100% honest,” he said. “I am trying my best to keep dreaming. Tomorrow is another day to keep dreaming. To keep playing in front of this amazing crowd and, to me, that means everything.”
Nadal will next face 31st-ranked Jiri Lehecka. He said he needs “to find a way to be able to play days in a row and still be competitive.”
“I don’t know if I am in that moment yet,” the 22-time Grand Slam champion said. “Let’s see what can happen tomorrow. But I gonna try. I gonna do the things the right way to try to be ready for tomorrow.”
The 37-year-old Nadal is trying to get in shape for next month's French Open. Since his latest injury layoff, he's had two matches in Barcelona and was pessimistic about his physical condition after arriving in Madrid. But he's won three more times in the capital.
Nadal again looked comfortable early on against Cachin. The Argentine fought back in the second set but was broken twice while serving for the set. Cachin eventually prevailed in the tiebreaker.
Nadal didn’t look as loose in the final set, but did look tired. He wasn't as consistent with his shots but picked up three breaks to seal the victory to the delight of the local crowd in the Caja Magica.
“I took more risks in the third set, but it’s hard after so many months without competing,” Nadal said. “I hadn’t played a match like this in a long time. Let’s see how it goes tomorrow. I don’t know how I’m going to wake up. But I’m already happy for having won three matches in a row.”
Cachin asked for Nadal's shirt after congratulating him at the net, and received the gift moments later.
Top-seeded Jannik Sinner was not at his best but had enough to defeat Pavel Kotov 6-2, 7-5. Sinner, who has been dealing with a hip issue, will face 16th-seeded Karen Khachanov.
“I have been struggling a little bit with my right hip,” Sinner said. “We’re trying to find a solution and I don’t think it’s anything serious. Sometimes I feel it more like today and some days are a little bit better."
Daniil Medvedev came from behind to defeat Sebastian Korda 5-7, 7-6 (4), 6-3. The third-seeded Russian was two points from defeat.
Fifth-seeded Casper Ruud beat Cameron Norrie 6-2, 6-4.
KEYS DOWNS GAUFF
Madison Keys rallied after trailing in the first and second sets to defeat Coco Gauff 7-6 (4), 4-6, 6-4 in an all-American fourth-round meeting.
It will be the 20th-ranked Keys' first quarterfinal appearance in Madrid. She lost in the first round in seven of her nine previous trips to the Spanish capital.
The third-seeded Gauff undermined herself with 38 unforced errors, including 13 double faults.
Keys will face eighth-seeded Ons Jabeur, who eased past Jelena Ostapenko 6-0, 6-4.
SWIATEK ADVANCES
Top-ranked Iga Swiatek remained on track for a first Madrid title by dispatching Sara Sorribes Tormo 6-1, 6-0.
Swiatek dropped just five points in the second set en route to the quarterfinals of the only major European clay tournament the Pole has yet to win.
The 27th-ranked Sorribes Tormo was the last Spanish woman in the draw.
Swiatek, who lost last year’s Madrid final to Aryna Sabalenka, will next face 11th-seeded Beatriz Haddad Maia, who defeated fifth-seeded Maria Sakkari 6-4, 6-4.
Mirra Andreeva celebrated her 17th birthday with a 7-6 (2), 6-4 win over 12th-seeded Jasmine Paolini. The teen sensation from Russia came from 5-2 down in the first set to reach the quarterfinals, a round further than she managed in Madrid a year ago.
Fourth-seeded Elena Rybakina defeated teenage qualifier Sara Bejlek 6-1, 6-3.
AP tennis: https://apnews.com/hub/tennis
Rafael Nadal of Spain reacts after winning a point against Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain reacts against Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Iga Swiatek of Poland returns the ball to Sara Sorribes of Spain during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Iga Swiatek of Poland reacts after defeating Sara Sorribes of Spain during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Iga Swiatek of Poland reacts after defeating Sara Sorribes of Spain during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Pedro Cachin of Argentina returns the ball to Rafael Nadal of Spain during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain serves to Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain returns the ball to Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain returns the ball to Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain watches his shot against Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain celebrates after defeating Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain celebrates after defeating Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
Rafael Nadal of Spain returns the ball to Pedro Cachin of Argentina during the Mutua Madrid Open tennis tournament in Madrid, Spain, Monday, April 29, 2024. (AP Photo/Manu Fernandez)
