Powell Signals Possible November Rate Cut if Inflation Keeps Cooling

Federal Reserve Chair Jerome Powell said a rate cut at the central bank’s November meeting is possible if upcoming inflation reports show continued progress toward the Fed’s 2% target. His remarks suggest policymakers are keeping the door open to easing, but remain dependent on fresh data before making a move.

The comments come as inflation has shown signs of moderation, though not enough to declare victory. The Fed’s preferred measure, core personal consumption expenditures (PCE) inflation, held at 2.7% in September, underscoring that price pressures remain somewhat sticky. While that reading is below the peaks seen in recent years, it is still above the central bank’s long-term goal.

Powell’s signal was closely watched by investors looking for clues on the Fed’s next step after a prolonged period of high interest rates. Financial markets are now pricing in an 85% probability of a 25-basis-point cut next month, reflecting growing confidence that policymakers may begin easing if inflation continues to trend lower.

Any decision in November will likely hinge on whether incoming data confirms that disinflation is broadening and durable. For now, the Fed appears to be balancing progress on inflation against the risk of cutting too soon.