Powell: Slowdown in U.S. hiring suggests economy still needs rate cuts

Federal Reserve Chair Jerome Powell indicated that a slowdown in U.S. hiring suggests the economy still requires interest rate cuts, forecasting two more reductions this year. Powell stated that despite disruptions from a government shutdown, the outlook for employment and inflation has not significantly changed since the Fed's September meeting, where they previously lowered rates and projected further cuts. Lower interest rates by the Federal Reserve are expected to decrease borrowing costs for consumers and businesses, impacting loans for mortgages and cars. Powell’s remarks reinforced the Fed's slight concern for the job market over price stability, noting that while inflation measures have risen due to tariffs, broader inflationary pressures are not widespread. This shift in assessment of risks to employment strengthens expectations for rate cuts, potentially starting at the Fed's next meeting in late October. In addition to potential rate cuts, Powell suggested the Fed may soon cease reducing its balance sheet, a process where maturing assets are not replaced. This move could gradually lower borrowing costs. The article also touches on Powell defending the Fed's past pandem... download the app to read more