Federal Reserve Chair Powell Signals More Rate Cuts Amid Hiring Slowdown Concerns
Federal Reserve Chair Jerome Powell warns a U.S. hiring slowdown risks the economy, signaling more interest rate cuts, with a decision expected October 29.
Overview
- Federal Reserve Chair Jerome Powell warned that a significant slowdown in U.S. hiring poses a substantial risk to the economy, necessitating potential interest rate reductions to support growth.
- The Federal Reserve is expected to implement two additional key interest rate cuts this year, with a specific decision anticipated at its upcoming October 29 meeting.
- Powell emphasized a greater concern for the stability of the job market over inflation, indicating this priority is a key driver for potential future interest rate adjustments.
- Despite gaps in federal data due to a government shutdown, Powell reiterated that the outlook for both employment and inflation has remained relatively stable since the September meeting.
- The Fed previously lowered borrowing costs in September, its first cut this year, and is now considering pausing the reduction of its substantial $6.6 trillion balance sheet.
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Analysis
Center-leaning sources cover Jerome Powell's remarks neutrally, presenting a balanced account of the Federal Reserve's considerations regarding interest rate cuts. They detail the complexities of the economic outlook, including labor market cooling, inflation concerns, and the challenges posed by the government shutdown and tariffs, without injecting editorial bias or loaded language.
"Rising downside risks to employment have shifted our assessment of the balance of risks."
CBS News"Powell acknowledged the risk that tariffs could contribute to persistent inflation rather than a one-time adjustment if the pass-through to consumer prices is slower than expected."
USA TODAY"A sharp slowdown in hiring poses a growing risk to the U.S. economy, Federal Reserve Chair Jerome Powell said Tuesday, a sign that the Fed will likely cut its key interest rate twice more this year."
ABC NewsArticles (7)
FAQ
Powell is concerned that a significant hiring slowdown could pose a substantial risk to economic growth, which may require interest rate cuts to support the economy.
The Federal Reserve is expected to implement two additional key interest rate cuts this year, with a decision anticipated at the October 29 meeting.
The Federal Reserve is currently prioritizing job market stability over inflation, which is a key factor driving potential future interest rate adjustments.
The government shutdown caused gaps in federal data, but Powell stated that the outlook for both employment and inflation has remained relatively stable since the September meeting despite these gaps.
The Federal Reserve is considering pausing the reduction of its substantial $6.6 trillion balance sheet amid current economic conditions.
History
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