Catenaa, Tuesday, October 14, 2025- US Federal Reserve Chair Jerome Powell said on Tuesday that the outlook for employment and inflation has not changed, but emphasized that “the downside risks to employment appear to have risen.”
That implies that another rate cut is possible at the Fed’s next meeting on October 28-29, even though Powell did say Tuesday that monetary policy will be set meeting by meeting.
While policymakers on the Fed’s 19-member Federal Open Market Committee have penciled in a median estimate of two more rate cuts for this year, Powell reiterated that there is “no risk-free path” as the Fed tries to navigate the balancing act of bringing inflation down while maintaining a healthy job market.
“I will stress again that these projections should be understood as representing a range of potential outcomes whose probabilities evolve as new information informs our meeting-by-meeting approach to policymaking,” Powell said in a speech in Philadelphia at the National Association for Business Economics.
Despite a government shutdown, which has delayed the release of important data such as the jobs report, Powell said, based on the data the Fed does have, “the downside risks to employment appear to have risen” and shifted policymakers’ assessment of the balance of risks.
“While official employment data for September are delayed, available evidence suggests that both layoffs and hiring remain low, and that both households’ perceptions of job availability and firms’ perceptions of hiring difficulty continue their downward trajectories.”
On the inflation side, the Fed chair said private-sector data and surveys continue to show that increases in the prices of goods primarily reflect tariffs rather than broader inflationary pressures.
Powell also gave his speech to say that the Fed may be getting to the point in the coming months where policymakers can stop their balance sheet runoff, or the allowance of bonds to mature and roll off the Fed’s portfolio, thereby decreasing the size of its balance sheet.
