23.09.202516:54:20UTC+00Fed Chair Powell Reiterates Shifting Balance of Risks

Federal Reserve Chairman Jerome Powell highlighted in a speech in Rhode Island that the central bank has adjusted its focus to prioritize economic growth concerns due to emerging signs of weakness in the labor market. He explained that although unemployment rates are still low by historical standards, they have risen, and job growth has decreased. This situation justified the decision to cut interest rates in September despite ongoing inflationary pressures. Powell emphasized that future rate decisions remain flexible, and noted the current policy stance is restrictive. In September 2025, the Federal Open Market Committee (FOMC) reduced its policy rate by 25 basis points to a target range of 4.00%–4.25%, as anticipated. The Federal Reserve's Summary of Economic Projections (SEP) indicated a further 50 basis points reduction by the end of 2025 and an additional 25 basis points in 2026—slightly above expectations set in June. Moreover, the GDP growth forecasts were revised upward for 2025 (1.6% compared to 1.4% in June), 2026 (1.8% from 1.6%), and 2027 (1.9% from 1.8%).