Jerome Powell in no rush to cut US interest rates – Monetary Policy

The US economy shows enough resilience for the US Federal Reserve (Fed)to avoid having to accelerate the cycle (already started) of policy interest cuts. The guarantee was given this Thursday by the president of the central bank, Jerome Powell.

“The economy does not show any sign that there is a need to rush to reduce interest rates“, highlighted the president of the Fed during a speech given in Dallas. “The strength of the economy that we are witnessing at the moment gives us the ability to make our decisions carefully”, he added.

Powell’s remarks come a week after the Fed decided, for the second time this year, to cut the federal funds rate. The reduction was 25 basis points for an interval between 4,50% e 4,75%.

After starting the cycle of falling interest rates on September 18th – but with a jumbo cut of 50 basis points – the central bank thus maintained the expected trajectory for the reference rate, and now a new reduction of 25 basis points at the December meeting.

It is worth remembering that, for 2025, the “dot plot” – quarterly map that shows how each central bank representative estimates changes in interest rates – presented in September showed that interest rates reached 3.4%, in a more optimistic view than that presented at the beginning of summer (3.4%). In 2026, the monetary authority estimated that the federal resources rate would reach 2.9%, below the 3.1% forecast in June.

The Fed’s next meeting is scheduled for December 17th and 18th and includes the release of new economic projections and the “dot plot”.

The central bank will make its decision based on “the data that is received”, as it has already assured in other meetings, including inflation – which in October rose from 2.4% to 2.6% (it was the first increase since March), slightly above the central bank’s 2% target.

The swap market points to a 46.5% probability that the monetary authority will decide, in December, to further reduce interest rates. Futures investors raise the bar to a probability of 62.4%.

(News updated at 8:37 pm).