S&P 500 falls as ongoing government shutdown, trade jitters weigh
Investing.com -- The U.S. labor market continued to show low hiring and firing activity through September, while the broader economy "may be on a somewhat firmer trajectory than expected," Federal Reserve Chair Jerome Powell said Tuesday at a National Association for Business Economics conference.
Powell indicated that the Fed will take a "meeting-by-meeting" approach to future interest rate decisions as officials balance weakness in the job market against inflation that remains above their 2% target.
"Based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago," Powell said, referring to the meeting where the Fed cut its benchmark interest rate by a quarter percentage point.
The Fed chair noted that economic growth data available before the current U.S. government shutdown suggests stronger-than-anticipated economic activity. The shutdown has delayed the release of September’s jobs report and other economic data.
Powell emphasized there is "no risk-free path for policy" as the Fed navigates tensions between employment and inflation goals. He pointed out that recent policymaker projections show a nearly even split between those who anticipate rate cuts at both the October and December meetings and those who expect one or fewer cuts by year-end.
These projections can change as new information becomes available, Powell stressed. "We will set policy based on the evolution of the economic outlook and the balance of risks, rather than following a pre-determined path."
Despite the delayed September jobs report, Powell said he has drawn insights from various public and private data sources. "Available evidence suggests that both layoffs and hiring remain low, and that both households’ perceptions of job availability and firms’ perceptions of hiring difficulty continue their downward trajectories," he explained.
The Fed chair attributed part of the elevated inflation to rising goods prices that "primarily reflect tariffs rather than broader inflationary pressures."
The Federal Reserve will hold its next policy meeting on October 28-29, with investors expecting another quarter-point rate reduction.