Powell's rare TV moment: Fed chair urges patience with high interest rates

• But Powell, who said the central bank was debating when to lower interest rates, underscored the importance of making sure inflation is defeated.

What they're saying: It's important "particularly for younger couples starting out who may not have great financial means, that we succeed in this effort," Powell said on "60 Minutes."

• "We will do so. But what that means is that interest-sensitive spending like mortgages and buying, you know, durable goods and things like that, that's going to be expensive for a while," Powell said.
• "But this is all part of getting back to a place of price stability when interest rates can be low again on a sustainable basis."

The intrigue: Powell said "yes" when CBS' Scott Pelley asked him whether he wanted Americans to have patience.

• "I think people have been patient and have been through a pretty difficult time. And I think now we're coming through that time and starting to feel a little bit better about things," Powell said.
• He said that for the Fed to get inflation down, "interest-sensitive areas, particularly housing are ... a good example of the kinds of things that do slow down when rates go up."

Zoom out: The average mortgage rate was 6.6% as of last week, according to Freddie Mac — down from the recent peak of nearly 8% at the end of last year on the anticipation the Fed will soon cut rates.

• But it's still well-above the rock-bottom levels during the height of economic lockdown as the Fed sought to rescue the economy from the pandemic-shock.
• Since the Fed's historic interest-rate hiking campaign, homebuyers have faced a double-whammy of high borrowing costs and high housing prices.

Of note: Powell also told "60 Minutes" that Americans shouldn't expect prices for a slew of goods or services to drop lower.

• "The prices of some things will decline. Others will go up. But we don't expect to see a decline in the overall price level," Powell said.
• Powell said high prices for "basic necessities" explains why Americans have been "relatively dissatisfied with what is otherwise a pretty good economy."

What to watch: In the interview, Powell said the central bank would likely still slash rates at least three times this year — a projection indicated in forecasts released in December.

• "[N]othing has happened in the meantime that would lead me to think that people would dramatically change their forecasts," Powell said.

Yes, but: The big question on the minds of economists and financial market-watchers is when the first rate cut will occur. Last week, Powell told reporters after the Fed's policy meeting that an interest rate cut in March looked unlikely.

• In the interview with "60 Minutes" — recorded one day after those comments — Powell doubled down on that statement.
• "We've said that we want to be more confident that inflation is moving down to 2%," Powell said. "[I]t's not likely that this committee will reach that level of confidence in time for the March meeting, which is in seven weeks."

Where it stands: The interview was recorded before the public release of the January jobs report that showed the economy created a stunning 353,000 jobs.

• That data may give Fed officials even more hesitancy to lower interest rates soon, for fear that a booming labor market could keep inflation high.

Between the lines: Powell told CBS that "weakness in the labor market" — which, so far, there is little sign of — and "inflation really persuasively coming down" would make the Fed want to cut interest rates sooner.

• "The kind of things that would make us want to move later would be if inflation were to be more persistent, for example," Powell added.