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The Federal Reserve can take its time deciding when and whether to cut interest rates, Fed Chair Jerome Powell told Congress Tuesday (The Wall Street Journal, subscription).

What’s going on: “We’re in a pretty good place with this economy,” he told the Senate Banking Committee. “We want to make more progress on inflation. And we think our policy rate is in a good place, and we don’t see any reason to be in a hurry to reduce it further.”

• After keeping rates near a two-decade high, the Fed cut interest rates at its last three meetings of 2024 by a full percentage point in a bid to get inflation to its goal of 2%.
• “The labor market appears to have stabilized after job growth slowed last summer,” the Journal reports. “The unemployment rate … ticked down to 4.0% last month. … Fed officials have been heartened by recent inflation readings that suggest price pressures have continued to run at mild levels that could soon put them much closer to their target.”

On long-term rates: While the Fed controls short-term interest rates, “Powell said it was possible longer-term interest rates would remain at higher levels if investors become more concerned about rising budget deficits or new shocks that generate inflation risks.”

• The Fed’s preferred inflation measure, the Personal Consumption Expenditures Price Index, dropped to 2.6% at the end of last year.