Coming off of a cut in the Federal Reserve’s key interest rate in September, Fed chair Jerome Powell is hinting more are coming.
A slowdown in hiring is a growing risk to the U.S. economy, Powell said in written remarks earlier this week, which could be an indication the Fed will cut rates twice more by year’s end.
According to a report from The Associated Press, Powell said the lack of economic data coming from the government amid the federal shutdown, the “outlook for employment and inflation does not appear to have changed much” since the Fed cut rates for the first time this year in September.
Fed officials at that meeting also indicated two more rate cuts this year, and one in 2026, are coming. Lower rates from the Fed could reduce borrowing costs for mortgages, car loans, and business loans.
Speaking before a meeting of the National Association of Business Economics in Philadelphia, Powell reiterated a message he first delivered after the September meeting, when he signaled that the Fed is slightly more worried about the job market than its other congressional mandate, which is to keep prices stable, according to the AP report.
Tariffs have lifted the Fed’s preferred measure of inflation to 2.9%, he said, but outside the duties there aren’t “broader inflationary pressures” that will keep prices high.
“Rising downside risks to employment have shifted our assessment of the balance of risks,” he said, according to the report.
