Fed Chair says central bank awaits clearer economic trends

(MENAFN) According to reports, US Federal Reserve Chair Jerome Powell said Wednesday that the central bank remains in a cautious, wait-and-see posture as it evaluates the direction of future monetary policy, following the Fed’s third interest rate reduction of 2025.

Speaking during a press briefing after the Fed’s policy meeting, Powell emphasized that the institution 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, placing it in the 3.5%–3.75% range. Reports noted that this was the third reduction of the year, following a period of five consecutive meetings with no change prior to the September cut.
The Fed indicated that it is closely monitoring risks on both sides of its dual mandate. It highlighted that pressures on employment have increased, with job growth weakening throughout the year.

Powell pointed to President Donald Trump’s broad tariff measures as a contributor to elevated inflation. “It’s really tariffs that’s causing most of the inflation overshoot," he said, but clarified that the inflationary impact would likely be temporary, noting, "Our job is to make sure that it is."

He also appeared to dismiss the prospect of future rate hikes, stating, “I don’t think that a rate hike ... is anybody’s base case at this point. I’m not hearing that.”
Powell acknowledged that Wednesday’s rate cut was a difficult decision for policymakers. Out of 12 governors, nine supported the move. Stephen Miran advocated for a larger 50-basis-point cut, while Jeffrey Schmid and Austan Goolsbee favored holding rates steady. Reports noted that the Fed last saw three dissenting votes at a single meeting in September 2019.

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