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Fed Chair Powell says there was 'not much support' for cutting rates on Wednesday

Key Points
  • "There was not much support for cutting rates now, at this meeting," Powell said Wednesday at a press conference following the Fed's decision to hold interest rates steady. 
  • The Federal Open Market Committee voted 9-1 to keep the benchmark rate in a target range of 2.25% to 2.5%.
  • "We felt that it would be better to get a clear picture of things… We will act as needed including promptly if that's appropriate and use our tools to sustain the expansion," Powell said.
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Powell: Not much support for cutting rates now

Federal Reserve Chairman Jerome Powell said the case for a rate cut at central bank's Wednesday meeting is not strong enough.

"There was not much support for cutting rates now, at this meeting," Powell said Wednesday at a press conference following the Fed's decision to hold interest rates steady.

"A number of people wrote down rate cuts, but all of those but apparently one felt that it would be better to see more before moving," he added.

The Federal Open Market Committee voted 9-1 to keep the benchmark rate in a target range of 2.25% to 2.5%. St. Louis Fed President James Bullard voted to reduce the rate.

Eight members favor one cut this year while the same number voted in favor of staying put and one still wants a rate hike, according to the "dot plot" of individual members' expectations.

Powell said the committee wants to wait and see if the recent signs of tensions would resolve before moving to ease the monetary policy.

"Some of these developments are so recent that we wanted to see if there was a sustain. We felt that it would be better to get a clear picture of things… We will act as needed including promptly if that's appropriate and use our tools to sustain the expansion," Powell said Wednesday.

Recent economic data have weakened with job creation drastically slowed in May while inflation remains consistently below the Fed's 2% target.

Powell also noted that "news about trade has been important driver of sentiment," but a trade deal with China would not necessarily take rate cuts off the table.