Powell: Fed still likely to cut rate this year

WASHINGTON — Chairman Jerome Powell reinforced his belief Wednesday that the Federal Reserve will cut its key interest rate this year but said it first wants to see more evidence that inflation is falling sustainably back to the Fed's 2% target.

His comments to a House committee largely echoed those he made at a news conference Jan. 31. Since then, however, government reports showed inflation picked up from December to January, and hiring accelerated. Those signs suggested the economy remains hot.

On the first of his two days of semi-annual testimony to Congress, Powell did not express concern about the inflation data. He noted that, according to the Fed's preferred gauge, inflation "eased notably over the past year" even though it remains above the central bank's target.