American Central Bank stated that there is no rush to lower interest rates because doing so could lead to an increase in inflation

America's central bank, the Federal Reserve, has indicated that it is in no hurry to cut interest rates. Addressing an event at the San Francisco Fed on Friday, Federal Reserve Chairman Jerome Powell said that we do not need to rush into cuts.

Powell said employment data has been strong. For this reason, the central bank is waiting for the inflation rate to come close to two per cent. Fed Chairman also expressed concern over early rate cuts. He said that if we reduce the rates too soon, there is a possibility that inflation will rise again and this will be adverse for the economy. Powell also acknowledged the risks of leaving interest rates at their current levels.

According to a New York Times report, the Federal Reserve is trying to balance the two risks. The first is that central bank officials do not want to keep interest rates at high levels for long. This risks unnecessary recession. Secondly, the authorities do not want to cut rates in a hurry before inflation comes under control.

The US Federal Reserve's Federal Open Market Committee met two days earlier and decided not to alter the benchmark interest rate.

Jerome Powell had stated even then that the interest rate had not changed because of the recent rate of inflation. Nonetheless, the central bank had hinted that it would reduce interest rates three times by year's end.