Fed Chair Jerome Powellsays no need to rush rate cuts, cites strong economy

Ongoing economic growth, a solid job market, and inflation that remains above the 2% target means the central bank does not need to rush to lower interest rates and can deliberate carefully, Federal Reserve Chair Jerome Powell said Thursday.In remarks that align with a developing expectation in financial markets for fewer rate cuts next year than previously forecast by Fed officials, Powell affirmed that he and his fellow policymakers still consider inflation to be “on a sustainable path to 2%” that will allow the central bank to move monetary policy “over time to a more neutral setting.”But the pace of rate cuts “is not preset,” Powell said at a Dallas Fed event, adding that “the economy is not sending any signals that we need to be in a hurry to lower rates.The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”Fed officials and investors are taking stock of how continued US economic strength and the uncertainty around the economic agenda of President-elect Donald Trump’s administration, particularly regarding tax cuts, tariffs and an immigration crackdown, may affect economic growth and inflation.Following an election last week that may have turned on voter perceptions of the nation’s economic ills, Powell said the current situation was actually “remarkably good.”The economy’s strengths include a still-low 4.1% unemployment rate, growth at what Powell called a “stout” 2.5% annual pace that remains above Fed estimates of its underlying potential, consumer spending driven by rising disposable income, and growing business investment.Yet key measures of inflation remain above target.The personal consumption expenditures price index for October has not been released yet, but Powell said recent data that feeds into it indicates the PCE excluding food and energy costs rose at a 2.8% rate last month – which would mark a fourth consecutive month in which t...