Fed Chair Jerome Powell recently stated that conditions “may warrant” interest rate cuts, but emphasized that the Fed will proceed cautiously.
Powell indicates conditions ‘may warrant’ interest rate cuts as Fed proceeds ‘carefully’ This is a cautious indication, not a definite commitment.
Strong Rally Today: Powell’s speech sparked the strongest cross-asset rally since April, with major ETFs tracking equities, Treasuries, credit and cryptocurrencies all rising at an average pace of 1.3%. Stock Market Today: Dow, S&P Live Updates for August 22 – Bloomberg The S&P 500, which climbed 1.7% Stock Market Today: Dow, S&P Live Updates for August 22 – Bloomberg, was powered by economically sensitive shares.
The Federal Reserve has kept interest rates steady at 4.25% to 4.5% for the fifth straight meeting this year Federal Reserve holds key interest rate steady for fifth straight meeting despite Trump’s pressure, despite pressure from the Trump administration for more aggressive cuts. The Fed has been navigating several competing factors:
Recent Fed meeting minutes from July showed that most officials agreed it was too soon to lower interest rates, though there were objections from two Fed governors Fed minutes August 2025 who favored cuts. The central bank appears to be closely monitoring both inflation trends and labor market conditions before making any moves.
Market analysts are anticipating potential rate cuts later this year, with some projecting cuts in September, October and December, followed by two more in 2026 Jerome Powell holds interest rate steady—and is looking through tariffs by not raising rates | Fortune to bring rates down to around 3-3.25%. However, Powell’s recent comments suggest the Fed remains data-dependent and will proceed cautiously with any rate adjustments.
The Fed’s deliberative approach reflects ongoing uncertainty about economic conditions and the need to balance supporting growth while maintaining price stability.
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