Live updates on January Fed rate decision

The Federal Reserve isn’t concerned that the economy is too strong right now, Chair Jerome Powell told CNBC’s Jeff Cox.

“We’ve had inflation come down without a slow economy and without important increases in unemployment. There’s no reason why we should want to get in the way of that process if it is going to continue,” he said.

“Continued declines in inflation are really the main thing we are looking at. Of course, we want the labor market to remain strong, too. We don’t have a growth mandate. We have a maximum employment mandate and a price stability mandate.”

— Michelle Fox

Consumer confidence has only begun to improve despite ongoing low unemployment. Federal Reserve Chair Jerome Powell acknowledged that consumer prices may be at least partly behind that sentiment.

“It’s been interesting that confidence surveys have been weak at a time when unemployment has been historically low for a couple of years. … We don’t pretend to have perfect wisdom on this, but one obvious answer is that prices went up more than 2% a year for a couple of years,” said Powell.

Even as inflation is coming down, the prices consumers pay remain elevated, he noted.

“That has to be some part of why people are unhappy, and they’re right to be unhappy,” Powell said.

— Hakyung Kim

Investors have been anticipating a potential rate cut or the beginning of a rate-cutting cycle at the March meeting, but Federal Reserve Chair Powell expressed skepticism about that timing Wednesday afternoon.

“Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March is the time to do that,” he said. “But that’s to be seen.”

“[March is] probably not the most likely case or what we would call the base case,” he added.

— Tanaya Macheel

The Federal Reserve is leaving its options open as it assesses the path ahead for interest rates and when to implement cuts, said Chair Jerome Powell.

“Of course, if labor, if inflation were to surprise by moving back up, we would have to respond to that and that would be a surprise at this point,” he said. “But I have to tell you that’s why we keep our options open here and why we’re not rushing.”

While markets have digested six months of good data, uncertainties linger and risks could reaccelerate inflation, he added.

— Samantha Subin

In addition to tighter monetary policy, the current disinflationary process has also come through “the healing of supply chains and the labor market,” Federal Reserve Chair Jerome Powell said at a post-meeting press conference.

The latter two factors “[are] really different from other cycles,” creating the “mixture” that has enabled inflation to fall thus far, Powell added.

— Hakyung Kim

Fed Chair Powell isn’t ready to declare a “soft landing.” The jargon describes a scenario where the economy is cooled without being tipped into a recession.

“Certainly, I’m encouraged and we’re encouraged by the progress,” Powell said. But “we’re not declaring victory at all at this point. We think we have a ways to go.”

— Alex Harring

Federal Reserve Chair Jerome Powell said on Wednesday afternoon that the FOMC has not yet begun to consider cutting rates.

“We’re not really at that stage, there was no proposal to cut rates. … We weren’t actively considering moving the federal funds rate down,” he said.

— Lisa Kailai Han

The central bank may need more signs that inflation is easing before it begins “dialing back the restrictive level” and cutting rates, said Federal Reserve Chair Jerome Powell.

“The median participant wrote down three rate cuts this year, but I think to get to that place where we feel comfortable starting the process, we need some confirmation that inflation is in fact coming down sustainably to 2%,” he said during a press conference Wednesday.

— Samantha Subin

While the six months of declines in inflation have been “a good story,” Federal Reserve Chair Jerome Powell said he is looking for more broad-based evidence that prices are falling.

When evaluating the inflation numbers, much of it is stemming from goods inflation, meaning the “services sector would have to contribute more” as inflation flattens out, said Powell.

“In other words, what we care about is the aggregate number — not so much the composition, but we just need to see more. That’s where we are,” Powell said.

“As a committee, we need to see more evidence that confirms what we think we’re seeing, and gives us confidence that we’re on a sustainable path [to] 2% inflation,” he continued.

— Hakyung Kim

Federal Reserve Chair Jerome Powell wants more evidence inflation is heading toward its 2% target, on top of a strong labor market, even after a raft of encouraging reports in recent months.

“We want to see more good data,” Powell said in his post-meeting press conference. “It’s not that we’re looking for better data, we’re looking for a continuation of the good data we’ve been seeing.”

“It gives us confidence that we’re on a path, a sustainable path, to 2% inflation,” Powell added.

— Sarah Min

Powell said during his prepared remarks that the Fed has likely completed all the interest rate hikes it needs to in this economic tightening cycle. But he said there may not be cuts on the immediate horizon.

“We believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said during the conference.

“But the economy has surprised forecasters in many ways since the pandemic and ongoing progress toward our 2% inflation objective is not assured,” he added. “The economic outlook is uncertain, and we remain highly attentive to inflation risks. We are prepared to maintain the current target range for the federal funds rate for longer if appropriate.”

— Alex Harring

Fed Chair Jerome Powell acknowledged that inflation has been falling in recent months, though not enough to convince the central bank that it can ease back on rates.

“The lower inflation readings over the second half of last year are welcome, but we will need to see continuing evidence to build confidence that inflation is moving down sustainably to our goal,” Powell said.

— Jesse Pound

The Federal Reserve’s January statement, released earlier this afternoon, indicates that the Federal Open Market Committee seems to be “reasonably satisfied with financial conditions at the moment,” according to Dennis Lockhart, the former president of the Atlanta Federal Reserve.

“The committee probably doesn’t really believe or have a lot of confidence they can manipulate market interest rates very much, so they just want to set the policy and let the markets react. I think their view is that at the moment, they’re clearly still restrictive, but at a satisfactory level,” he told CNBC’s “Power Lunch” on Wednesday.

Lockhart added that the FOMC seems to have added additional language indicating it is not ready to lower interest rates in an effort to “reduce the frenzy of an anticipation around a March move.”

— Lisa Kailai Han

Federal Reserve Chair Jerome Powell said the U.S. economy has made some good progress, with inflation easing from its highs without signs of increased unemployment. Still, there is work to be done, he said.

“Inflation is still too high, ongoing progress in bringing it down is not assured and the path forward is uncertain,” Powell said.

“I want to assure the American people we are fully committed to returning inflation to our 2% goal.”

— Michelle Fox

It’s still unclear if the Federal Reserve will move to cut rates in March after Wednesday’s statement, according to Ian Lyngen, head of U.S. rates at BMO.

“While this doesn’t take a March cut off the table completely, it also isn’t an endorsement of a move on March 20th,” he said in a note.

The strategist noted that the statement also omitted the reference to tighter financial and credit conditions, which is a nod to the fact financial conditions have eased notably.

— Yun Li

The Federal Reserve has set the table for rate cuts starting in June, according to David Kelly, chief global strategist for JPMorgan Asset Management.

“It sounds to me like June, September, December is what they are thinking — three rate cuts this year — provided the economy keeps growing,” he said in an interview with CNBC following the release of the Federal Reserve’s statement.

“There doesn’t seem to be, at the moment, a sign that the U.S. economy is going to keel over and fall into recession any time soon,” he added. “Until they see greater damage — or potential damage — to the economy given to the huge runup in the markets we’ve seen, they just see the balance of risk more being on the side of inflation being sticky than the economy falling into recession.”

— Michelle Fox

There are lots of changes when comparing Wednesday’s Federal Open Market Committee statement with the one issued after the previous policymaking meeting in December. Click here to see all the differences and similarities.

— Alex Harring

Central bank policymakers said they aren’t yet ready to start cutting rates, according to their meeting statement.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the statement said.

The news chilled investors, and stocks slipped slightly. The S&P 500 lost 0.9%, and the Nasdaq Composite was off 1.4%. The Dow Jones Industrial Average ticked down 0.1%.

Read more about the Fed’s rate decision here.

— Darla Mercado

The Federal Reserve has left interest rates unchanged in January. It’s the fourth consecutive time that the central bank has decided to keep steady on rate policy.

The fed funds rate remains at a range of 5.25% to 5.5%.

— Darla Mercado