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US Federal Reserve Chair says central bank is in “wait-and-see” stance
(MENAFN) According to reports, U.S. Federal Reserve Chair Jerome Powell stated Wednesday that the central bank remains in a cautious, wait-and-see stance as it evaluates future monetary policy, following the Fed’s third rate cut of 2025.
At a post-meeting press briefing, Powell said the Fed is “well positioned to determine the extent and timing of additional adjustments based on the incoming data, the evolving outlook of the balance of risks.” He added, “We’ll carefully evaluate that incoming data, and also, I would note that having reduced our policy rate by 75 basis points since September and 175 basis points since last September, Fed funds rate is now within a broad range of estimates of its neutral value and we are well positioned to wait and see how the economy evolves.”
The central bank lowered its benchmark federal funds rate by 25 basis points to a target range of 3.5% - 3.75%, as expected. This marks the third cut this year, after five meetings with no change earlier in 2025 and an initial reduction in September.
Powell highlighted that the Fed is monitoring both sides of its dual mandate, noting that downside risks to employment have increased and job growth has slowed over the year. He also cited President Donald Trump’s tariffs as a primary driver of inflation, saying, “It’s really tariffs that’s causing most of the inflation overshoot,” but added that the effect is likely a “one-time” price spike. “Our job is to make sure that it is,” he said.
Addressing the possibility of future rate hikes, Powell indicated that such moves are unlikely, stating, “I don’t think that a rate hike ... is anybody’s base case at this point. I’m not hearing that.”
The decision to lower rates was supported by nine of the 12 Fed governors. Stephen Miran preferred a 50 basis point cut, while Jeffrey Schmid and Austan Goolsbee voted to keep rates unchanged. This marks the first Fed meeting since September 2019 to record three dissenting votes.
At a post-meeting press briefing, Powell said the Fed is “well positioned to determine the extent and timing of additional adjustments based on the incoming data, the evolving outlook of the balance of risks.” He added, “We’ll carefully evaluate that incoming data, and also, I would note that having reduced our policy rate by 75 basis points since September and 175 basis points since last September, Fed funds rate is now within a broad range of estimates of its neutral value and we are well positioned to wait and see how the economy evolves.”
The central bank lowered its benchmark federal funds rate by 25 basis points to a target range of 3.5% - 3.75%, as expected. This marks the third cut this year, after five meetings with no change earlier in 2025 and an initial reduction in September.
Powell highlighted that the Fed is monitoring both sides of its dual mandate, noting that downside risks to employment have increased and job growth has slowed over the year. He also cited President Donald Trump’s tariffs as a primary driver of inflation, saying, “It’s really tariffs that’s causing most of the inflation overshoot,” but added that the effect is likely a “one-time” price spike. “Our job is to make sure that it is,” he said.
Addressing the possibility of future rate hikes, Powell indicated that such moves are unlikely, stating, “I don’t think that a rate hike ... is anybody’s base case at this point. I’m not hearing that.”
The decision to lower rates was supported by nine of the 12 Fed governors. Stephen Miran preferred a 50 basis point cut, while Jeffrey Schmid and Austan Goolsbee voted to keep rates unchanged. This marks the first Fed meeting since September 2019 to record three dissenting votes.
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