Fed's Powell: Economy "remarkably good," no need to hurry lowering rates
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Fed chair Jerome Powell. Photo: Kent Nishimura/Getty Images)
The U.S. economy is in strong shape, Federal Reserve chair Jerome Powell said Thursday, which means the central bank can move carefully as it cuts interest rates.
Why it matters: The direction of Fed policy is clear — the central bank is likely to cut interest rates further — but Powell's remarks indicate that it is uncertain how fast and how far those rate reductions will be.
What they're saying: "The recent performance of our economy has been remarkably good, by far the best of any major economy in the world," Powell said in Dallas, according to prepared remarks.
- He said that the path for cutting rates further "is not preset," and that the economy "is not sending any signals that we need to be in a hurry to lower rates."
- "The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully," he said at an event hosted by the Dallas Fed, Dallas Regional Chamber, and World Affairs Council.
Catch up quick: The Fed cut its main interest rate target by a combined 0.75 percentage point at its last two policy meetings and is expected to cut by another quarter-point at its mid-December meeting.
- But recent indicators have pointed to strong growth and stickier inflation than Fed officials would prefer, which throws into question how much more the central bank will move.
- "Inflation is running much closer to our 2 percent longer-run goal," Powell said Thursday, "but it is not there yet. We are committed to finishing the job."
Between the lines: President-elect Trump has been a sharp critic of Powell and the Fed and has said he should have a say over interest rate policy. Powell, whose term extends to May 2026, is determined to maintain the central bank's traditional political independence.
- In a news conference last week, Powell said he would not resign prematurely even if the president asked him to, and that it was "not permitted under the law" for a president to demote or fire a Fed governor before the end of their term.
Go deeper: Fed chair Powell won't resign if Trump asks
