Fed Chair Powell: “No fixed path — we will decide rates meeting by meeting”
Following the Fed’s decision to lower interest rates to the 3.50–3.75% range, Chair Jerome Powell said government shutdown–related data delays have not changed the overall outlook: “Uncertainty is high. We don’t have a predetermined path — our decisions will be made on a meeting-by-meeting basis.”
The US Federal Reserve cut its policy rate by 25 basis points, bringing the federal funds target to 3.50–3.75%, in line with market expectations. With this move, the Fed delivered its third 25-basis-point cut of 2025, completing a total reduction of 75 basis points for the year. Speaking after the decision, Fed Chair Jerome Powell noted that the broader economic picture remains intact despite delayed data caused by the government shutdown. Powell emphasized: “There is too much uncertainty to commit to a specific path. We will adjust policy based on incoming data, one meeting at a time.”
“Our dual mandate remains the focus — the economic outlook hasn’t fundamentally changed”
Powell said that although the government shutdown delayed some key indicators, the overall macroeconomic landscape looks similar to the Fed’s previous assessment.
He highlighted that economic activity continues to expand at a moderate pace, while consumer spending remains solid.
Powell added that the Fed’s median projection for growth this year stands at 1.7%, slightly higher than September forecasts.
Labor market shows “signs of cooling”
Despite the limited flow of official data, Powell said labor market conditions are still broadly clear:
Hiring and layoffs have remained low, but pressures on employment have increased somewhat in recent months.
He reminded that the latest available figures show the unemployment rate rising to 4.4%, noting that part of this increase is likely due to a slowing labor force expansion.
Inflation data limited but still elevated
Powell said inflation-related indicators have been sparse since October because of the shutdown, but the most recent PCE reading appears slightly higher compared with earlier in the year.
He stressed that this keeps the Fed cautious as it assesses the timing and pace of further easing.
“Too much uncertainty — decisions will be data-dependent”
Powell’s most defining message was clear:
“There is too much uncertainty to lay out a fixed path. We will decide policy meeting by meeting.”
This signals that the Fed will avoid setting any predetermined rate-cut trajectory, keeping the door open for adjustments depending on economic developments.
Third rate cut of 2025 completed
The decision marks the Fed’s final rate cut of 2025, wrapping up a year in which officials lowered rates three times in response to uneven labor data, sticky inflation, and mixed macro signals.
Financial markets interpreted Powell’s remarks as an indication that the central bank will maintain its cautious tone in the meetings ahead.
