Federal Reserve Chairman Powell emphasized the economy’s solid condition by stating, “We intend to use our tools to maintain it.” Powell expressed that they will not rush to rapidly decrease interest rates. Jerome Powell, the Chair of the Federal Reserve (Fed), indicated that the U.S. economy is generally in a solid state and that the bank intends to utilize its tools to preserve that. Speaking at the National Association for Business Economics’ (NABE) annual meeting, Powell provided evaluations on the economic outlook. Following the Federal Open Market Committee (FOMC) meeting on September 18, where the Fed cut policy rates by 50 basis points, Powell made his first statements on monetary policy, highlighting that they will consider incoming data, evolving perspectives, and risk balances when evaluating additional policy adjustments. “WE’RE NOT ON A PREDETERMINED PATH” Powell stated, “Looking ahead, if the economy develops generally as expected, policy will gradually move towards a more neutral stance over time, but we’re not on a predetermined path.” Emphasizing Fed’s commitment to maximum employment and price stability objectives, Powell mentioned, “Risks are two-sided, and we will continue to make decisions from meeting to meeting.” Powell stated, “Overall, the economy is in a solid state, and we intend to use our tools to maintain it.” Powell reiterated that the decision to cut interest rates by 50 basis points reflects growing confidence in the sustainability of moderate economic growth and inflation to fall sustainably to 2% in the context of maintaining strength in the labor market. “NO NEED FOR FURTHER CHILLING” Powell highlighted that the U.S. economy is generally robust and has made significant progress on achieving maximum employment and price stability objectives in the past 2 years. He described labor market conditions as solid and cooler than their previous overheated state. Powell also noted increased confidence that inflation is easing and heading towards a sustainable trajectory of 2%. With core service inflation, excluding housing, close to pre-pandemic rates, Powell remarked, “Housing service inflation continues to decline but at a slow pace.” Powell indicated that the rate of increase in rents for new tenants continues to remain low, suggesting that housing service inflation will continue to decline as long as the situation remains the same. Powell acknowledged that broader economic conditions are setting the stage for disinflation, stating, “We don’t believe that more chilling in labor market conditions is necessary to reach 2% inflation.” “NO RUSH TO LOWER RATES” Powell stated that the FOMC is not a committee that rushes to lower interest rates rapidly, reiterating that decisions will be guided by incoming data. “If the economy slows more than expected, then we may cut interest rates faster. If it slows less than expected, we may cut rates slower,” Powell noted, emphasizing that the FOMC will do what is necessary regarding the pace of interest rate cuts. Powell explained that if the economy performs as expected, there could be two more 25-basis point interest rate cuts this year. Additionally, in response to a question about Fed’s role in natural disasters, Powell pointed to last week’s Hurricane Helene reaching Category 4 along Florida’s coast. Powell encouraged bankers to work with customers affected by disasters and mentioned that in such situations where power outages occur, there is a need for cash. Powell stated that they ensure that banks have access to available cash in such circumstances.