Fed Chair Jerome Powell wants more proof inflation is falling before cutting interest rates

Federal Reserve Chair Jerome Powell said the central bank will cut its benchmark interest rate this year — but not yet.

In comments before a House panel on Wednesday that echoed his previous outlook, Powell noted that U.S. prices are falling for both goods and services. Inflation "has eased notably over the past year," although it remains above the Fed's 2% annual target, he said.

On the first of his two days of semi-annual testimony to Congress, Powell also suggested that the Fed faces two roughly equal risks: Cutting rates too soon — which could "result in a reversal of progress" in reducing inflation — or cutting them "too late or too little," which could weaken the economy and hiring.