Federal Reserve Chair Jerome Powell on Wednesday acknowledged signs of a cooling labor market even as inflation pressures persist. Speaking at the post-meeting news conference following the Fed’s decision to cut rates by 25 basis points, Powell outlined the challenges facing policymakers.
“While the unemployment rate remains low, it has edged up, job gains have slowed, and downside risks to employment have risen,” Powell said. “At the same time, inflation has risen recently and remains somewhat elevated.”
The remarks highlight the balancing act the Fed faces as it weighs slowing job growth against the need to bring inflation closer to its 2% target. Powell reiterated that the Federal Open Market Committee (FOMC) remains committed to its dual mandate of price stability and maximum employment.
Markets are now closely watching the Fed’s forward guidance and dot plot projections, which indicate two additional cuts in 2025, bringing the federal funds rate down to as low as 3.50%–3.75% by year-end.
