Federal Reserve Chair Jerome Powell spoke before the annual meeting of the National Association for Business Economics on Monday, suggesting the central bank will continue to lower interest rates but stressing the downward path for rates is not on a preset course.
Powell said the decision to slash rates by half a percentage point earlier this month reflects the Feds growing confidence that an appropriate recalibration of monetary policy will maintain strength in the labor market and keep inflation moving sustainably down to the 2 percent target.
Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance, Powell said.
But we are not on any preset course, he continued. The risks are two-sided, and we will continue to make our decisions meeting by meeting.
Powell said Fed officials have greater confidence that inflation is on a sustainable path to 2 percent and predicted there would not need to be further cooling in labor market conditions to achieve their objective.
As we consider additional policy adjustments, we will carefully assess incoming data, the evolving outlook, and the balance of risks, Powell said. Overall, the economy is in solid shape; we intend to use our tools to keep it there.
We remain resolute in our commitment to our maximum-employment and price-stability mandates, he added. Everything we do is in service to our public mission.