Catenaa, Tuesday, September 23, 2025- US Federal Reserve Chair Jerome Powell on Tuesday stressed that they will approach future interest rate cuts cautiously while balancing the labor market and prices.
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.”
His approach is in sharp contrast to some members of the Fed’s rate-setting committee who are pushing for faster cuts.
On Monday, Stephen Miran, whom President Donald Trump appointed to the Fed’s governing board, said that the Fed should quickly reduce its rate to as low as 2% to 2.5%, from its current level of about 4.1%.
Miran is also a top adviser in the Trump administration and expects to return to the White House after his term expires in January, though Trump could appoint him to a longer term.
And earlier Tuesday, Fed governor Michelle Bowman also said the central bank should cut more quickly. Bowman, who was appointed by Trump in his first term, said inflation appears to be cooling while the job market is stumbling, a combination that would support lower rates.
When the Fed cuts its key rate, it often, over time, reduces other borrowing costs for things like mortgages, car loans, and business loans.
On Tuesday, Austan Goolsbee, president of the Federal Reserve’s Chicago branch, said in an interview on CNBC that the Fed should move slowly given that inflation is above its 2% target.
“With inflation having been over the target for 4 1/2 years in a row, and rising, I think we need to be a little careful with getting overly up-front aggressive,” he said.
