USA, Nashville: Federal Reserve Chair Jerome Powell signaled on Monday that while further interest rate cuts are likely, they will be executed at a measured pace to support the strong economy. Speaking at the National Association for Business Economics conference in Nashville, Powell's comments tempered investor hopes for a significant half-point reduction before year-end, following the Fed's recent half-point cut earlier this month.

The Fed reduced its key rate to 4.8% from a two-decade high of 5.3%, anticipating two additional quarter-point cuts in November and December. Powell emphasized that these adjustments will depend on economic data, notably the upcoming jobs report, which could influence the Fed's strategy if it reveals rising unemployment or weak hiring.

Powell reiterated the Fed’s focus on maintaining a healthy economy and job market rather than responding to a crisis. He described the current interest rate as being recalibrated towards a “neutral stance,” which aims not to stimulate or suppress economic activity. The Fed's goal remains to sustain a solid economy, as inflation decreased to 2.2% in August, while the unemployment rate fell slightly to 4.2%.

Overall, Powell’s remarks reflect a shift in the Fed's approach to include a dual focus on jobs and inflation, moving away from a strict emphasis on controlling price increases. He noted that, over time, rate reductions should lower borrowing costs for consumers and businesses, fostering continued economic growth.