11/14/2024

Given the Strong Economy, Powell Says There is Need for Fed to Rush Rate Cuts

Traders expect fewer rate cuts in 2025

Ongoing economic growth, a solid job market and inflation that remains above the 2 percent target mean the U.S. central bank does not need to rush to lower interest rates and can deliberate carefully, Federal Reserve Chair Jerome Powell said on Thursday.

In remarks that align with a developing expectation in financial markets for fewer rate cuts next year than previously forecast by Fed officials, Powell affirmed that he and his fellow policymakers still consider inflation to be "on a sustainable path to 2 percent" that will allow the U.S. central bank to move monetary policy "over time to a more neutral setting."

But the pace of rate cuts "is not preset," Powell said at a Dallas Fed event, adding that "the economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully."

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