Well positioned to wait and see: US Fed’s Jerome Powell on further interest rate cuts

US Federal Reserve Chairman Jerome Powell The US central bank’s interest rate policy is well positioned to wait and respond to the way the economy is developing. This could be seen as an indication of a pause in rate cuts at the upcoming FOMC meeting.“We are well positioned to determine the extent and timing of additional adjustments based on the incoming data, the evolving outlook and the balance of risks,” Powell said at a news conference.

The Fed cut rates for the third time this year by 25 basis points to 3.5%-3.75%.

Powell declined to provide clear guidance on whether another rate cut is in the offing in the near future, saying: “I note that after cutting our policy rate by 75 basis points since September and by 175 basis points since September last year, the fed funds rate is now within a wide range of estimates of its neutral value and we are well positioned to wait and see how the economy develops.”

He added: “Monetary policy does not follow a set course, and we will make our decisions on a meeting-by-meeting basis.”

However, Powell made it clear that the Fed’s next move is unlikely to be a rate hike as this is not the base case reflected in new projections from central bank policymakers.

“I don’t think a rate hike is anyone’s base case,” he said. The U.S. Federal Reserve’s decision to cut rates was not easy, Powell said, pointing to competing tensions between inflation risks and a weakening labor market. “It’s a close call. We have to make decisions,” he told reporters.

(With input from agencies)