Jerome Powell says Fed Isn’t in Hurry to Cut Interest Rates

Federal Reserve Chairman Jerome Powell said Thursday that the central bank isn’t in a hurry to cut interest rates further.
During a speech in Dallas, Powell said that inflation is getting closer to the Fed’s 2 percent target, “but it is not there yet.”
Consumer prices rose 2.6 percent in October from a year earlier, the Labor Department said Wednesday, up from 2.4 percent in September. It was the first rise in annual inflation in seven months.
Powell did say, however, that the economy is strong, adding that the Fed’s policymakers can take time to monitor the course of inflation.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”
The Fed lowered its benchmark rate, which was at a 23-year high, by a half-percentage point to between 4.75 and 5 percent in September.
The federal funds rate was raised by the Fed 11 times in 2022 and 2023 to curb high inflation, which hit both the United States and countries around the world after the COVID-19 pandemic. September’s interest rate cut was the first in four years.
Last Thursday, the Fed cut rates by a quarter-point again, lowering rates to between 4.5 to 4.75 percent.
The federal funds rate is the target interest rate at which commercial banks borrow and lend their extra reserves to one another overnight. If the federal funds rate continues to decrease, the cost of consumer borrowing—including mortgages, auto loans and credit cards—should go down over time.
Experts predict the Fed to cut interest rates by another quarter-point in December. But after that, it’s much less clear what the Fed will do.
Fed officials collectively signaled in September that they saw the central bank cutting its benchmark rate four times in 2025. Wall Street now expects just two Fed rate cuts, according to CME FedWatch.
Powell called the nation’s domestic growth “by far the best of any major economy in the world” on Thursday.
The International Monetary Fund (IMF) predicted in its latest World Economic Outlook report released last month that the U.S. gross domestic product will increase by 2.5 percent in the fourth quarter, which is from October through December, from a year prior—the fastest forecasted growth out of the seven major advanced economies of the world.
This article includes reporting from The Associated Press.