Fed sees three 2024 rate cuts as Powell backs go-slow approach

WASHINGTON (Reuters) -- Federal Reserve Chair Jerome Powell said on Wednesday recent high inflation readings had not changed the underlying "story" of slowly easing price pressures in the U.S., but added that recent data also had not bolstered the central bank's confidence that the inflation battle has been won.

Powell, speaking after a policy meeting at which officials left rates unchanged and held onto their outlook for three cuts in borrowing costs this year, said the timing of those reductions still depended on officials becoming more secure that inflation can continue to decline towards the Fed's 2% target in an economy that continues to outperform expectations.

Inflation reports at the beginning of the year showed price pressures remained "elevated," in the Fed's view, but "haven't really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road to 2%," Powell told reporters. "I also don't think that those readings added to anyone's confidence" of a continued decline in inflation.

The decision on when to cut rates will depend on more data, Powell said, to determine if the disappointing readings that started the year continue.

"We want to be careful," the Fed chief said, reiterating a go-slow approach to rate cuts that has been buttressed by the economy's ongoing strength, leaving officials in no rush to ease monetary policy while the economy and the job market continue to grow.

While officials affirmed their view for three rate cuts this year, they also upgraded their outlook for economic growth and projected slightly slower progress on inflation over the course of the year.

The Fed's benchmark overnight interest rate, as expected, was held steady on Wednesday in the