Another rate cut in December is not a foregone conclusion, Powell says at press conference

[Federal Reserve Chair Powell Holds Monthly News Conference On Interest Rates]
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The Federal Open Market Committee discussions at its meeting on Tuesday and Wednesday showed "strongly differing views about how to proceed in December," Federal Reserve Chair Jerome Powell said on Wednesday in his post-meeting press conference. "A further reduction in the policy rate at the December rate is not a foregone conclusion. Far from it."

"We haven't made a decision about December," he added.

Earlier on Wednesday, the Federal Open Market Committee trimmed its benchmark rate by 25 basis points for a second straight meeting, bringing the federal funds rate target range to 3.75%-4.00%, as widely expected.

Private sector and market surveys indicate that the outlook for employment and the economy hasn't changed much since the last, he said. Even without the government data, layoffs rates still appear to be low, he said

Inflation for goods have picked up, he observed. Near-term inflation expectations have increased, but longer-term expectations remain consistent with the Fed's 2% inflation goal.

He repeated that the effect of tariffs on inflation will likely be short-lived, but it's also possible they could lead to persistent inflation.

There's still "no risk-free path" as the Fed navigates tension between inflation and employment goals.

He also addressed the Fed's decision to stop shrinking its balance sheet. "Signs have clearly emerged" that "we have reached that standard" of reserves beings somewhat above ample levels, Powell said. In three years, the balance sheet has been reduced by $2.2T. The Fed will hold the size of its balance sheet steady "for some time."

UPDATE AT 2:46 PM ET: If there were a material change in the economy, Powell said he'd believe the policymakers would have enough data and market observations to see that, even without the federal government data.

State-level data on initial jobless claims are indicating "more of the same" on the labor front, Powell said.

Developing... check back for updates.

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