Powell Warns Against Assuming Another Rate Cut in December
- Rahaman Hadisur
- Nov 9, 2025
- 2 min read
Hadisur Rahman, JadeTimes Staff
H. Rahman is a Jadetimes news reporter covering Business
US Federal Reserve Chair Jerome Powell has cautioned investors not to assume that the central bank will deliver another interest rate cut in December, following its second consecutive reduction announced on Wednesday.
The Federal Reserve lowered its benchmark interest rate by a quarter of a percentage point to a range of 3.75 to 4 percent and said it would restart limited purchases of Treasury securities. The decision was backed by a 10-2 vote within the Federal Open Market Committee.
In his post-meeting remarks, Powell said, “A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.” His comments quickly shifted market sentiment, pushing Treasury yields and the US dollar higher, while stocks turned lower. Traders scaled back expectations for another cut, with the probability falling from over 90 percent to about 60 percent.
The Fed also announced plans to end the shrinking of its balance sheet starting December 1. Since 2022, the central bank has reduced its holdings by more than two trillion dollars, bringing the total below 6.6 trillion, its smallest size since 2020.
Powell noted that the ongoing government shutdown has limited access to key economic data, making it harder for officials to assess the economy’s direction. “If you are driving in the fog, you slow down,” he said, suggesting the Fed may proceed cautiously in the coming months.
While Powell maintained that inflation is moving toward the two percent target, he acknowledged that economic growth remains moderate and that risks to employment have increased.
Policymakers remain divided on future rate cuts. Some members have warned against easing too quickly, given that inflation is still running above target, while others stress the need to support a cooling labor market.
