Powell describes Wednesday’s rate cut a ‘closer call’ but ‘right call’

US Federal Reserve Chair Jerome Powell described Wednesday’s decision to cut interest rates as a “closer call,” though he emphasised it was ultimately the right choice to support the central bank’s dual mandate.
“I would say today was a closer call, but we decided it was the right call because we thought it was the best decision to foster achievement of both of our goals, maximum employment and price development,” Powell told the press conference.
He explained that moving too slowly could harm economic activity in the labour market, while moving too quickly might jeopardise progress on inflation. The Fed is aiming to navigate carefully between these two risks.
Looking ahead, Powell noted that any rate cuts implemented by the Fed in 2025 would depend on incoming data rather than current projections.
“I think the actual cuts that we make next year will not be because of anything we wrote down today. We’re going to react to data; that’s just the general sense of what the committee thinks is likely to be appropriate,” Powell said, addressing the revised forecast of two quarter-point rate cuts for 2025, down from an earlier projection of four.
Powell added: “But as for additional cuts, we’re going to be looking for further progress on inflation as well as continued strength in the labour market. And as long as the economy and the labour market are solid, we can be cautious as we consider further cuts.”