WASHINGTON (AP) — Federal Reserve Chair Jerome Powell signaled Monday that more interest rate cuts are in the pipeline but suggested they would occur at a measured pace intended to support a still-healthy economy.
His comments, at a conference of the National Association for Business Economics in Nashville, Tennessee, disappointed the hopes of many investors that the Fed would implement another steep half-point reduction in its key rate before the end of the year. The Fed cut its rate by a larger-than-usual half point earlier this month as it has moved past its inflation fight and pivoted toward supporting the job market.
The broad S&P 500 stock index fell 0.2% in afternoon trading, while the Dow Jones Industrial Average dropped 0.5%.
“We’re looking at it as a process that will play out over some time,” Powell said during a question and answer session, referring to the Fed's interest rate reductions, “not something that we need to go fast on. It’ll depend on the data, the speed at which we actually go.”
At their last meeting Sept. 18, Fed officials reduced their rate to 4.8%, from a two-decade high of 5.3%, and penciled in two more quarter-point rate cuts in November and December. On Monday, Powell said that remains the most likely outcome.
“If the economy performs as expected, that would mean two more cuts this year,” both by a quarter-point, Powell said.
In prepared remarks, Powell said the U.S. economy and hiring are largely healthy and emphasized that the Fed is “recalibrating” its key interest rate, as opposed to cutting rapidly as it would in an emergency.
He also said the rate is headed “to a more neutral stance,” a level that doesn't stimulate or hold back the economy. Fed officials have pegged the so-called “neutral rate” at about 3%, significantly below its current level.
Powell emphasized that the Fed's current goal is to support a largely healthy economy and job market, rather than rescue a struggling economy or prevent a recession.
“Overall, the economy is in solid shape,” Powell said in written remarks. “We intend to use our tools to keep it there.”
Inflation, according to the Fed’s preferred measure, fell to just 2.2% in August, the government reported Friday. Core inflation, which excludes the volatile food and energy categories and typically provides a better read on underlying price trends, ticked up slightly to 2.7%.
The unemployment rate, meanwhile, ticked down last month to 4.2%, from 4.3%, but is still nearly a full percentage point higher than the half-century low of 3.4% it reached last year. Hiring has slowed to an average of just 116,000 jobs a month in the past three month, about half its pace a year ago.
Over time, the Fed’s rate reductions should reduce borrowing costs for consumers and businesses, including lower rates for mortgages, auto loans, and credit cards.
“Our decision ... reflects our growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate economic growth and inflation moving sustainably down to 2%,” Powell said.
Since the Fed’s rate cut, many policymakers have given speeches and interviews, with some clearly supporting further rapid cuts and others taking a more cautious approach.
Austan Goolsbee, president of the Fed’s Chicago branch, said that the Fed would likely implement “many more rate cuts over the next year.”
Yet Tom Barkin, president of the Richmond Fed, said in an interview with The Associated Press last week, said that he supported reducing the central bank’s key rate “somewhat” but wasn’t prepared to yet cut it all the way to a more neutral setting.
A big reason the Fed is reducing its rate is because hiring has slowed and unemployment has picked up, which threatens to slow the broader economy. The Fed is required by law to seek both stable prices and maximum employment, and Powell and other policymakers have underscored that they are shifting to a dual focus on jobs and inflation, after centering almost exclusively on fighting price increases for nearly three years.
FILE - Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington, Sept. 18, 2024. (AP Photo/Ben Curtis, File)
UNITED NATIONS (AP) — The U.N. Security Council voted unanimously Monday to extend the mandate of the Kenya-led multinational force helping to tackle gang violence in Haiti, after brushing off a call from Haiti to start talks on transforming it into a U.N. peacekeeping mission.
According to the final draft obtained by The Associated Press, China and Russia succeeded in eliminating the paragraph in the resolution that acknowledged the call by the president of Haiti’s transitional presidential council at the U.N. General Assembly “to start a discussion” on moving to a U.N. peacekeeping force.
Last Thursday’s call by Edgard Leblanc Fils was the first public announcement of support by a government official since the United States proposed a U.N. peacekeeping mission in early September as a way to secure more resources for the Kenya-led mission.
Nearly 400 Kenyan officers are now in Haiti, joined by nearly two dozen police officers and soldiers from Jamaica. The officers fall significantly short of the 2,500 pledged by various countries, including Chad, Benin, Bangladesh and Barbados for the mission. It is also seriously short of funding.
U.S. Ambassador Linda Thomas-Greenfield told the Security Council that the 15-0 vote “sends a strong message to the people of Haiti: The world is standing with you. And we are unwavering in our efforts to help restore security and stability and put the country on the path to peace and stability.”
She said additional financial contributions are urgently needed for the multinational force and also called on council members to heed Haiti’s call for a U.N.-funded peacekeeping operation.
China’s deputy U.N. ambassador Geng Shuang countered that “The U.N. has sent multiple peacekeeping operations in Haiti, but the results have never been satisfactory, and the lessons learned have been extremely profound.”
He called for the implementation of the mandate of the Kenya-led force, stressing that discussing other options now will only interfere with its operation, and adding that peacekeeping operations are not a panacea.
“Haiti does not have the conditions for the deployment of peacekeeping operations right now,” Geng said.
Russia’s deputy U.N. ambassador Dmitry Polyansky echoed his Chinese ally, saying only three months have passed since the deployment of the Kenyan officers and Russia expects the multinational force to expand its presence.
“Until this happens, we believe it is premature to plan any transformation to the international presence or any changes thereof,” he said.
Gangs have grown in power since the July 7, 2021 assassination of President Jovenel Moïse and are now estimated to control up to 80% of the capital, and have moved into surrounding areas. The surge in killings, rapes and kidnappings has led to a violent uprising by civilian vigilante groups.
Leblanc told the annual gathering of world leaders at the General Assembly that while the current U.N.-backed mission has made some inroads, “a lot still remains to be done” and security continues to deteriorate.
He said Haitians still live in fear and cannot move around the country freely, unable to work or send their children to school without great risk.
The short resolution adopted Monday extends the Multinational Security Support mission until Oct. 2, 2025. It encourages the mission “to accelerate its deployment, and further encourages additional voluntary contributions and support for the mission.”
Kenyan police officers, part of a UN-backed multinational force, stand in formation on their base during a visit by Kenya's President William Ruto, in Port-au-Prince, Haiti, Saturday, Sept. 21, 2024. (AP Photo/Odelyn Joseph)
Kenya's President William Ruto, right, and Transition Council President Edgard Leblanc, arrive to the Kenyan base in Port-au-Prince, Haiti, Saturday, Sept. 21, 2024. (AP Photo/Odelyn Joseph)
A member of the Police Music Band jumps over the welcome mat before the arrival of Kenya's President William Ruto at the Toussaint Louverture International Airport in Port-au-Prince, Haiti, Saturday, Sept. 21, 2024. (AP Photo/Odelyn Joseph)
Kenyan police officers, part of a UN-backed multinational force, stand next to armored vehicles on their base during a visit by Kenya's President William Ruto, in Port-au-Prince, Haiti, Saturday, Sept. 21, 2024. (AP Photo/Odelyn Joseph)
Kenyan police, part of a UN-backed multinational force, receive the plane transporting Kenya's President William Ruto, at their base in Port-au-Prince, Haiti, Saturday, Sept. 21, 2024. (AP Photo/Odelyn Joseph)
Kenya's President William Ruto, center left, visits Kenyan police, part of a UN-backed multinational force, at their base in Port-au-Prince, Haiti, Saturday, Sept. 21, 2024. (AP Photo/Odelyn Joseph)
UN extends Kenya-led force to tackle gangs in Haiti, but sidelines call for UN peacekeepers
UN extends Kenya-led force to tackle gangs in Haiti, but sidelines call for UN peacekeepers
The president of Haiti's transitional presidential council, Edgard Leblanc Fils, addresses the 79th session of the United Nations General Assembly, Thursday, Sept. 26, 2024, at U.N. headquarters. (AP Photo/Frank Franklin II)
