Wall Street had been betting on another quarter-point interest rate cut from the central bank at its last meeting of the year in December. <\/p>\n
But those bets fell after Powell on Wednesday stressed that a December cut is “not to be seen as a foregone conclusion – in fact, far from it”.<\/p>\n
“Future moves are becoming more contentious,” said Michael Pearce, deputy chief US economist at Oxford Economics. “We expect the Fed to slow the pace of cuts from here.”<\/p>\n
A lot might still change before the Fed’s next meeting. It could receive three new jobs reports, which could “significantly change perceptions of the labour market for better or worse”, Michael Feroli, chief US economist at JP Morgan, wrote in a note.<\/p>\n
At the same time, if the government shutdown persists and continues to limit the availability of government data, that could also encourage the Fed to sit on its hands at the end of the year.<\/p>\n
“What do you do if you’re driving in the fog? You slow down,” Powell said.<\/p>\n
He told reporters that “there were strongly differing views about how to proceed” among members of the Fed’s committee, and the decision will ultimately depend on incoming economic data.<\/p>\n
“We’re going to collect every scrap of data we can find,” Powell said.<\/p>\n