what did Powell said about rate cuts

Federal Reserve Chairman Jerome Powell's guidance on interest rate cuts has undergone a significant reversal, shifting from a dovish stance in late 2024 to a markedly more hawkish position by April 2026. In November 2024, following a quarter-point rate cut, Powell stated that inflation was "beaten" and signaled a plan for "aggressive rate cuts," with the baseline expectation being a gradual lowering of rates toward a neutral level [5, 27, 28]. This dovish outlook, which was still anticipated by some experts as late as October 2025 , has been completely upended. By late April 2026, surging energy prices and persistent inflation led markets to aggressively reprice expectations, with Fed Funds futures indicating **no rate cuts through 2026** [1, 3, 6, 12, 13, 15, 16, 17, 20]. This shift aligns with Powell's long-standing condition, first articulated in July 2024, that the FOMC would not cut rates until it gained "greater confidence that inflation is moving sustainably toward 2%" .

The recent hawkish pivot is underpinned by a deep and growing division within the Federal Open Market Committee (FOMC). The committee's latest policy decision was marked by an **8-4 vote**, a level of dissent not seen since the 1990s [2, 4, 8, 9, 14, 22]. A significant faction of the committee is now pushing to abandon the Fed's explicit easing bias in favor of a neutral stance, where a future rate hike would be as likely as a cut [4, 8, 14]. Powell has directly addressed this internal pressure, acknowledging that while a majority does not yet support such a change, the number of members who do has increased [10, 18, 19, 30]. Critically, Powell stated that a formal shift to a neutral policy stance could conceivably occur as soon as the next FOMC meeting, signaling that the bar for any future rate cuts is now substantially higher [2, 8, 23, 25].

This policy recalibration is being driven by significant external inflationary pressures that are complicating the Fed's path forward. Geopolitical tensions have pushed Brent crude oil prices above **$120 per barrel**, creating a major headwind in the fight against inflation [1, 3]. Powell has noted that the economic impact of high oil prices is a key variable for the committee . Beyond energy, analysts point to broader global economic shifts, including a move from a savings glut to a savings deficit driven by the need to reshore and reallocate capital, which may necessitate a higher term premium on long-dated government debt [1, 7]. These macroeconomic factors have reinforced the Fed's more cautious approach, making further easing unlikely until there is clear and convincing evidence of a sustainable return to the 2% inflation target.