U.S. Federal Reserve Chair Jerome Powell said during a public speech that interest rates are likely to decline in coming months but questioned the exact timing and size of future cuts.
In a speech delivered to the National Association for Business Economics in Nashville, Tennessee, Powell appeared to pour cold water on markets that are betting on aggressive rate cuts from the central bank in coming months.
“We are not on any preset course… We will continue to make our decisions meeting by meeting,” he said in prepared remarks, adding that interest rates should move lower “over time.”
Powell also said that inflation continues to move towards the U.S. central bank’s 2% annualized target and that the focus is now on the American labour market, which has begun to slow.
On Sept. 18, the U.S. Federal Reserve lowered interest rates by 50-basis points, taking the range of its benchmark Fed Funds Rate down to 4.75% to 5.00%.
The September rate cut was viewed as aggressive by the stock market and futures traders are betting that the Fed will lower rates by another 75-basis points at its two remaining meetings in November and December of this year.
The latest inflation data showed that consumer prices rose an annualized 2.2% in August, which is near the central bank’s 2% target.
