Federal Reserve Chairman Jerome Powell reiterated Tuesday that a policy rate cut would not be “appropriate” until the Fed gains greater confidence that inflation is heading sustainably toward 2%, he said during his semiannual testimony before the Senate Banking Committee. Reducing policy restraint too soon or too much could stall or even reverse the progress made on inflation, Powell told the Senate committee. “We need to see more good inflation data,” Powell said, adding that the timing for interest rate cuts relies on the data. He also reiterated his June statement that an unexpected weakening in the labor market could lead to lower interest rates. Powell: Economy No Longer Overheated The U.S. economy has made significant strides toward the 2% inflation goal, the Federal Reserve chair said. Recent monthly readings indicate modest further progress, and more positive data would strengthen confidence that inflation is moving sustainably toward the target, he said. “This is no longer an overheated economy,” Powell said. “This is an economy that is more or less back by most measures to where it was before the pandemic.” The recent decline in inflation is due to improving supply factors, such as ...