Federal Reserve Chair Jerome Powell announced on Monday that additional interest rate cuts are forthcoming, contingent on economic trends. This follows a substantial half-point reduction earlier this month, leaving investors and economists speculating on the Fed’s next steps.
During the National Association for Business Economics meeting in Nashville, Powell emphasized the health of the US economy and job market, stating that the Fed is recalibrating its key rate, currently at about 4.8%, towards a neutral stance of around 3%.
Powell highlighted the Fed’s intention to support economic stability and job market strength, with inflation falling to 2.2% in August while core inflation slightly increased to 2.7%. Despite a modest decline in the unemployment rate, hiring has significantly slowed, prompting the Fed to focus on preventing further unemployment increases, which should lead to lower borrowing costs.
(With inputs from agencies.)