More Interest Rate Cuts Likely, Powell Says at Forum
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WASHINGTON — Federal Reserve Chair Jerome Powell indicated Sept. 30 that more interest rate cuts are likely, though their magnitude and timing would depend on economic developments.
Wall Street investors and economists are considering whether the Fed will follow its larger-than-usual half-point cut earlier this month with another substantial reduction at either of its upcoming meetings in November or December. At their Sept. 18 meeting, Fed officials projected two more quarter-point rate cuts at those final meetings this year.
In remarks before the National Association for Business Economics in Nashville, Tennessee, Powell said the U.S. economy and job market are generally healthy. He emphasized that the Fed is “recalibrating” its key interest rate, which is now about 4.8%.
He also said the rate is headed “to a more neutral stance,” a level that neither stimulates nor restrains the economy. Fed officials have estimated the “neutral rate” at about 3%, significantly below its current level.
Powell stressed that the Fed’s current goal is to support a largely healthy economy and job market, rather than rescue a struggling economy or prevent a recession.
“Overall, the economy is in solid shape,” Powell said in written remarks. “We intend to use our tools to keep it there.”
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