Federal Reserve Chair Jerome Powell said the Fed’s policy remains ‘modestly restrictive’ but flexible, leaving room for further cuts if needed|@federalreserve|X
Federal Reserve Chair Jerome Powell said Tuesday that slowing job growth is now outweighing concerns about inflation, explaining last week’s decision to cut the central bank’s key interest rate.
Speaking in Providence, Rhode Island, Powell noted that both labor supply and demand are softening, while tariffs have led to price increases.
He described the US economy as facing stagflation-like conditions, with slower growth and elevated inflation, though far less severe than in the 1970s.
Powell said the Fed’s policy remains “modestly restrictive” but flexible, leaving room for further cuts if needed.
Stocks dipped during his remarks as Powell cautioned that assets are “fairly highly valued.”
Payroll growth slowed to below 30,000 in the summer months, while inflation remains above the Fed’s 2% target, highlighting the challenge of balancing low unemployment with price stability.