Powell signals Federal Reserve to move slowly on interest rate cuts

Source: AP

Updated 2:37 PM EDT, September 23, 2025


WASHINGTON (AP) — Federal Reserve Chair Jerome Powell on Tuesday signaled a cautious approach to future interest rate cuts, in sharp contrast with other Fed officials this week who have called for a more urgent approach.

In remarks in Providence, Rhode Island, Powell noted that there are risks to both of the Fed’s goals of seeking maximum employment and stable prices. But with the unemployment rate rising, he noted, the Fed agreed to cut its key rate last week. Yet he did not signal any further cuts on the horizon.

If the Fed were to cut rates “too aggressively,” Powell said, “we could leave the inflation job unfinished and need to reverse course later” and raise rates. But if the Fed keeps its rate too high for too long, “the labor market could soften unnecessarily,” he added.

Powell’s remarks echoed the caution he expressed during a news conference last week, after the Fed announced its first rate cut this year. At that time he said, “it’s challenging to know what to do.”

Read more: https://apnews.com/article/federal-reserve-jobs-inflation-powell-bccc5ad2114d0f9a19e0f6db4aeadf82