Powell Signals Fed May Hold Rates Steady as Inflation Cools

Federal Reserve Chair Jerome Powell signaled that interest rates are likely to stay unchanged at the central bank’s December meeting, pointing to fresh inflation data that suggests price pressures are easing. In a late-afternoon speech, Powell said recent consumer price index figures, which showed annual inflation slowing to 2.6%, support a cautious approach as policymakers assess whether progress toward the Fed’s 2% target is durable.

The remarks reinforced market expectations that the Federal Reserve will keep its benchmark rate steady for now after an aggressive tightening cycle aimed at bringing inflation under control. Investors welcomed the signal, with Treasury yields edging lower as traders priced in a reduced chance of near-term policy changes.

The U.S. dollar index remained broadly stable around 106, reflecting a measured response from currency markets. Analysts said the reaction suggested cautious optimism that the Fed may be nearing the end of its rate-hike campaign, even as officials continue to emphasize that decisions will depend on incoming data.

Powell’s comments underscore the central bank’s balancing act: ensuring inflation continues to cool without slowing the economy more than necessary. For now, the latest data appears to give policymakers room to wait and see.