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- The Federal Reserve held interest rates steady on Wednesday.
- Fed Chair Powell previously said it'd take more positive economic data before he started cutting rates.
- Still, some Democratic lawmakers want a timeline for when the relief will come this year.
Interest-rate cuts aren't coming for Americans just yet.
In its second meeting of 2024, the Federal Open Market Committee announced Wednesday it would continue its pause on interest-rate increases. In line with predictions, this move came after the consumer price index, which measures inflation, rose 3.2% year over year in February — above the 3.1% January reading and the Fed's 2% inflation target.
The FOMC's December Summary of Economic Projections penciled in three interest-rate cuts for 2024. Fed Chair Jerome Powell told the House Financial Services Committee earlier this month that while rate cuts were still on the table for this year, the central bank was not ready to put them into place just yet.
"We want to see a little bit more data so that we can become confident," Powell said. "We're not looking for better inflation readings than we've had. We're just looking for more of them."
While many Americans might be hoping for the relief a rate cut would bring, Powell said he did not want to risk doing so too soon and having to further tighten the rates later on.
Still, some Democratic lawmakers want Powell to provide a timeline for implementing the rate cuts, given the financial strain many Americans continue to face. On Monday, the Congressional Progressive Caucus led 22 lawmakers — including Sens. Elizabeth Warren and Bernie Sanders — in sending a letter to Powell urging him "to seriously consider the harmful economic consequences of maintaining excessively high interest rates for an unnecessarily long period of time."
"With inflation already having come into line with the Federal Reserve's target, today's excessively contractionary monetary policy needlessly worsens housing market imbalances and the unaffordability of home ownership, creates risks for banking stability, and could threaten the achievements of strong employment and wage growth and its attendant reductions in economic and racial inequalities," they wrote.
While the mortgage market is not directly tied to the Fed's decisions, the consecutive interest-rate increases since the pandemic started caused borrowing costs to rise. That's left many Americans struggling to find affordable housing — especially given the limited supply — but Treasury Secretary Janet Yellen previously told Fox Business that she expected rent costs to soon start coming down.
"I have every expectation that the single biggest contributor to inflation is going to be moving down over this year," she said.
As to when interest rate cuts will come, Powell said he's looking at the data — and he's not in a rush.
"We think because of the strength in the economy and the strength in the labor market and the progress we've made, we can approach that step carefully and thoughtfully and with greater confidence," he told the House. "When we reach that confidence, the expectation is we will do so sometime this year. We can then begin dialing back that restriction on our policy."