Federal Reserve Chair Jerome Powell signaled that the central bank could cut interest rates twice in 2026, pointing to further progress in bringing inflation down. His remarks suggest policymakers are becoming more confident that price pressures are easing, even as they remain alert to possible setbacks.

Powell's comments reflect a cautious stance rather than a firm commitment. While inflation has cooled from earlier peaks, the Fed still sees enough uncertainty to avoid moving aggressively. Officials are weighing whether recent data are strong enough to justify easing monetary policy without reigniting price growth.

The message from the central bank is one of balance: inflation has improved, but risks have not disappeared. Any rate cuts would likely depend on whether upcoming economic reports continue to show stable price trends and a resilient labor market.

For households and businesses, the Fed's outlook matters because lower borrowing costs could eventually ease pressure on mortgages, credit cards, and business loans. But Powell's guidance indicates that any relief will likely come only if the inflation picture keeps improving.