Don't count on interest rate cuts any time soon, the Fed says

Don't count on interest rate cuts any time soon, the Fed says
Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting on November 1, 2023 at the Federal Reserve in Washington, DC. Kevin Dietsch/Getty Images
  • The Fed continued its pause on interest rate hikes in November.
  • Fed Chair Powell said interest rate cuts are not part of the discussion right now.

The Federal Reserve doesn't want Americans thinking an interest rate cut is coming anytime soon.

On Wednesday, the nation's central bank announced it would be continuing its pause on interest rates hikes in November, following the pause in September. Federal Reserve Chair Jerome Powell said this decision was made following the positive inflation and employment data over the past month, but when it comes to interest rate cuts, he said the issue isn't even up for discussion right now.

"We're not talking about rate cuts. We're still very focused on the first question, which is, have we have we achieved a stance of monetary policy that's sufficiently restrictive to bring inflation down to 2% over time sustainably? That is the question we're focusing on," Powell said during the press conference after Wednesday's decision.

"The next question will be, for how long will policy remain restrictive? And what we said there is that we'll keep policy restrictive until we're confident that inflation is on a sustainable path down to 2%," he said.

While he did not indicate whether the Federal Open Market Committee will choose to increase interest rates during its next meeting in December, Powell emphasized that the Fed is "proceeding carefully" as it determines its next move to fight inflation.


"The risk of doing too much versus the risk of doing too little are getting more close to balance," Powell said, also noting that the committee still does not forecast a recession right now.

Part of the uncertainty moving forward comes from conflicts abroad. Powell said the Fed will continue to monitor the economic implications of the ongoing wars in Israel and Ukraine, also noting that a potential government shutdown after November 17 poses a risk to the economy.

Democratic Rep. Brendan Boyle, ranking member of the House Budget Committee, said in a statement that "the Fed is right to continue the pause in interest rate hikes" but also "must avoid a costly overcorrection that could threaten this progress."

"House Republicans must start doing their jobs by keeping the government open and delivering the emergency funding we need to lower costs, provide disaster relief, and support our allies around the world," he added.