Federal Reserve Chair Jerome Powell characterized the central bank’s latest rate cut as a step aimed at balancing risks across the economy.
“You can think of this, in a way, as a risk management cut,” Powell said at Wednesday’s post-meeting press conference, after the Fed lowered its benchmark rate by 25 basis points to 4.00%–4.25%.
Powell noted that the labor market presents a “very different picture” than earlier this year, stressing that it is “really cooling off.” At the same time, he acknowledged that inflation has risen recently and remains somewhat elevated, underscoring the Fed’s challenge in pursuing its dual mandate of stable prices and maximum employment.
The decision, backed by a majority of the Federal Open Market Committee (FOMC), comes as investors and policymakers debate how far and how fast rates should fall through 2025. The Fed’s dot plot projections currently point to two additional cuts this year.
