Powell Acknowledges Stubborn Inflation Despite Rate Cuts
- The Federal Reserve cut interest rates by 25 basis points on November 7, 2024.
- Jerome Powell indicated that inflation is still a major concern due to specific pressures, including housing and insurance costs.
- Market analysts predict further cuts could occur if inflation shows signs of easing, but caution is advised.
On November 7, 2024, the Federal Reserve announced a widely anticipated 25 basis point interest rate cut, which relieved investors but left them uncertain about future policy directions. Federal Reserve Chair Jerome Powell cited noteworthy growth factors, such as robust consumer spending and a strong labor market. However, he also pointed out that inflation continues to be a significant concern, attributed mainly to lagging pressures like shelter and insurance costs. As a result of these inflationary pressures, Powell emphasized that the Fed's approach remains data-driven, raising caution regarding potential future cuts. Analyst Maia G. Crook noted the possibility of another interest rate cut in December, contingent on the inflation rate's trajectory. While this cautious stance reinforces the Fed's independence from political influences, the persistent inflation indicates a more complex economic picture that might delay more aggressive easing of monetary policy.