Fed Chair Powell Calls for Further Inflation Reduction Before Considering Additional Rate Cuts

Federal Reserve Chair Jerome Powell emphasized on Wednesday that the central bank is seeking "further progress on inflation" before contemplating further interest rate reductions. The recent decision to cut the key interest rates by 25 basis points reflects a cautious approach, Powell explained, stating, "As long as the economy and the labor markets are solid, we can afford to be cautious in our considerations for further cuts."

In a notable revision, Powell shared that the Fed now anticipates two rate cuts in 2025, a reduction from the four cuts projected in September's estimate. Despite this adjustment, Powell assured that the central bank remains "on track to continue cutting" rates in the coming year. However, he underscored that future rate cuts will be contingent upon economic data deemed "likely to be appropriate" by the committee.