Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on March 18, 2026 in Washington, DC. Anna Moneymaker | Getty ImagesFederal Reserve Chair Jerome Powell, in a wide-ranging talk at Harvard University, said Monday that he sees inflation expectations as grounded despite rising energy prices and no signs yet of a widespread crisis in private credit.As his term leading the central bank nears an end, Powell avoided questions about the longer-term direction of interest rates or inclinations his designated successor has espoused.In the near term, he said the proper move is to look beyond the short-term gyrations of the energy market and focus on the Fed’s goals of stable prices and low unemployment.”Inflation expectations do appear to be well anchored beyond the short term, but nonetheless, it’s something we will eventually maybe face the question of what to do here,” he said during a question-and-answer question with a moderator and students. “We’re not really facing it yet, because we don’t know what the economic effects will be, but we’ll certainly be mindful of that broader context when we make that decision.”As he has in the past, Powell said he believes the current rate target, in a range between 3.5%-3.75%, is “a good place” for the Fed to sit as it observes events currently playing out, including the Iran war and the impact tariffs are having on prices.The comments appeared to register in financial markets, with traders no longer pricing in a significant chance of a rate hike this year. As recently as Friday morning, traders were looking at a better than 50% probability of a quarter percentage point increase amid expectations the Fed would react to the surge in energy costs. However, odds of a hike fell to 2.2% after …
