Jerome Powell says Fed can afford to be a little more cautious
Federal Reserve Chair Jerome Powell on Wednesday said the economy is stronger now than the central bank had expected in September when it began reducing interest rates, and appeared to signal his support for a slower pace of interest-rate cuts ahead.
«The U.S. economy is in very good shape and there's no reason for that not to continue ...the downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation has come in a little higher,» Powell said at a New York Times event. «So the good news is that we can afford to be a little more cautious as we try to find neutral.»
His remarks during a wide-ranging half-hour interview that touched only lightly on monetary policy and the economy are likely his last before the Dec. 17-18 policy meeting, as the quiet period when Fed officials refrain from speaking about monetary policy ahead of a meeting starts on Saturday. In-depth comments by some of Powell's key colleagues this week have pointed in the direction of a third straight interest-rate cut, with Governor Christopher Waller saying on Monday he was «leaning toward» a reduction even as others decline to pre-commit to that outcome.
Powell's own remarks on Wednesday appear to align him with that more cautious bloc of policymakers and largely echoed his last public appearance in mid-November, when he said the Fed could «carefully» deliberate over its rate cuts and need not be in a hurry.
Inflation and jobs data since then, and Waller's comments in particular,
