Federal Reserve Chair Jerome Powell addressed business leaders in Dallas, emphasizing a cautious approach to interest rate adjustments as inflation shows signs of persistence. Despite a slight uptick in inflation for October, Powell noted that the U.S. economy remains strong and does not indicate an urgent need for rate cuts.
Powell stated, "The economy is not sending any signals that we need to be in a hurry to lower rates," reinforcing the Fed's commitment to carefully monitor inflation trends before making any policy changes. The central bank has already implemented a quarter-point rate cut last week, with expectations for additional cuts in the coming months.
Market reactions indicated a decrease in the likelihood of a December rate cut following Powell's remarks, with traders estimating a probability of just below 59%. Powell highlighted that maintaining the Fed's independence from political pressures is crucial for effective monetary policy, especially in light of potential changes under President-elect Donald Trump's administration.