Inflation under control, U.S. Fed signals patience on interest rates

March 31, 2026 (MLN): U.S inflation expectations remain well anchored despite rising energy prices, Federal Reserve Chair Jerome Powell said Monday, signaling that the central bank does not see a need to raise interest rates in the near term.

Speaking at Harvard University, Jerome Powell emphasized that the Fed is focused on its long-term goals of stable prices and low unemployment, rather than reacting to short-term market gyrations, according to CNBC.

Jerome Powell, whose term ends in mid-May, avoided commenting on the future direction of interest rates or on the preferences of his nominated successor, former Governor Kevin Warsh, whose confirmation is stalled in the Senate Banking Committee.

He noted that the current rate target of 3.5%-3.75% is a good place to observe how events like the Iran conflict and tariffs influence the economy.

Markets responded to Powell’s remarks by dialing back expectations of a rate hike this year.

Just last week, traders had priced in more than a 50% chance of a quarter-point increase, but odds of a hike by December fell to 2.2%.

Jerome Powell cautioned that acting too soon could hurt the economy later, noting the lagged effects of monetary policy.

On private credit, he acknowledged rising defaults and investor withdrawals in the $3 trillion sector but stressed that no systemic risks have been detected.

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