Powell's Stance: Steady on Rates Amid Economic Growth

Federal Reserve Chair Jerome Powell suggests that the central bank will take its time in adjusting interest rates despite economic growth and persistent inflation. Financial markets anticipated fewer rate cuts, reacting by pulling back stock prices and slightly altering bond yields.

Federal Reserve Chair Jerome Powell emphasized a measured approach to interest rate adjustments during remarks on Thursday. Despite ongoing economic growth and inflation above the 2% target, Powell noted the central bank's ability to carefully deliberate on rate changes.

This announcement aligns with market expectations for fewer rate cuts next year, as Powell conveyed confidence in inflation moving toward a stable 2% target. He underscored the potential for future monetary policy to transition to a more neutral stance over time.

Following Powell's statements, financial markets saw the S&P 500 drop, US Treasury yields slightly adjust, and the dollar index rise. Analysts noted the market's cautious response to Powell's less dovish tone, amid reports indicating steady job growth and inflation above target.

(With inputs from agencies.)