Fed chair Powell says US economy is in ‘solid shape’ with more rate cuts coming
30 September 2024, 19:14
At their meeting September 18, Fed officials pencilled in two more quarter-point rate cuts this year.
Federal Reserve chair Jerome Powell has signalled that more interest rate cuts are in the pipeline, though their size and speed would depend on the evolution of the economy.
Wall Street investors and economists are weighing whether the Fed will follow its larger-than-usual half-point cut made earlier this month with another hefty reduction at either of its upcoming meetings in November or December.
At their meeting September 18, Fed officials pencilled in two more quarter-point rate cuts at those final meetings this year.
In remarks before the National Association for Business Economics in Nashville, Tennessee, Mr Powell said the US economy and hiring are largely healthy and emphasised that the Fed is “recalibrating” its key interest rate, which is now at about 4.8%.
He also said the rate is headed “to a more neutral stance”, a level that does not stimulate or hold back the economy.
Fed officials have pegged the so-called “neutral rate” at about 3%, significantly below its current level.
Mr Powell emphasised 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,” Mr Powell said in written remarks. “We intend to use our tools to keep it there.”
