Oct 30, 2025
3 min read
Powell reiterates rate hike expected in December after meeting with 'difficult views'
The Federal Reserve cuts interest rates by 0.25 basis points due to fears of an economic slowdown
Powell opens door to freeze on expected December rate cut after meeting 'very different views'
Given the fear of an economic slowdown and the risks of not controlling prices, the Fed chose the first option for the first student operation, after the previous data was the second reduction in the cost of money, after another similar action in September to try to boost economic activity.
Federal President Jerome Powell left the door open for them to hold another meeting in December before deciding whether to pursue it.Powell accepted the division in the meeting of the staff for further reductions and others to apply to the governors.At the council meeting, there are deep thoughts about what to do in December.Today, the councilor, Stephen Minan, decided to cut half of the section and did not touch them.
"We never made a decision in December. I always say that they don't make decisions in advance, but in this case I want to add that it is not a baseless conclusion. In fact, it came from it," he emphasized.These words provoked a reaction in the financial markets.The industrial index SP 500 turned out to post progress during the session to post drops of almost half a point.
Signs that growth in the world's leading economy is slowing are beginning to accumulate despite the US government's statistical blackout.Dozens of federal agencies have shut down or are at half throttle as Republicans and Democrats are unable to negotiate a budget extension.Still, the latest available data point to a slowdown in the labor market.below last year's level.This is influenced by concerns about the labor market, the cost of living and a significant increase in uncertainty due to the tariffs approved by US President Donald Trump.
"For a long time, the risks to both targets (inflation and employment) were clearly associated with higher inflation. But that has changed. As we saw, especially after the July meeting, we saw a downward revision to job creation and a very different outlook for the labor market, which indicated more downside risks to employment than we had expected," Powell added."This indicated that the monetary policy that we had maintained at a level that I would say was restrictive to say the least (others would say moderate) had to evolve towards a neutral position. If both objectives were equally threatened, it would be ideal to maintain a neutral position, because one requires an increase and the other a decrease. Therefore, if equilibrium is restored, it would be logical to open the door by not maintaining a neutral position," he said.december
US economic growth data for the third quarter will be released this Thursday, which will number on the spread of the economic downturn.The country is at risk of falling into the Stagflation region, a period of low growth and high inflation that endangers the pockets of citizens and businesses.Counting the most inactive products in the basket, such as food and fresh energy, also rose 3 percent, exceeding the federal target.
Uncertainty about the real consequences of the tariffs is also attached to the meeting. "When all the tariffs are effective, they stop producing inflation."
Fed officials continue to strike a complicated balance between inflation and labor market conditions.regardless of differencesThe stability of these two variables contributes to the task of monetary policymakers in the United States in a complex environment created by a government shutdown.Collection of customs dutiesand the anti-immigration crusade.Downgrading of US employment numbersThis indicates that job creation fell more than expected.Still, unemployment is at a record low of 4.3 percent, a rate that economistsIt is called full employment.Analysts say the sharp discrepancy is explained by a drop in labor supply due to Trump's stricter immigration policies.There is little employment.But there are also fewer firings. In short, companies are signing fewer contracts.But there are fewer people willing to work.It remains to be seen how long this conflict can be sustained.
Doubts are also being cast on the housing market.House prices in the United States in August were published this Tuesday by S & P Sevativi-Shiller.The real estate market is at risk after thousands of federal workers were laid off by Trump's policy.
We'll have to wait until the next meeting of the interest rate-setting Federal Open Market Committee (FOMC, in its English dictionary) to see how the concerns of these opposing forces: renewing the ups and downs of the economy have developed.
The meeting is taking place in a tense environment amid mounting pressure from President Trump to take control of the Federal Reserve.For months, Republicans have waged a campaign of bullying and undermining against Fed Chairman Jerome Powell, whom he repeatedly berated and insulted in his bid to resign.year remains, which could reduce Republican strength.
For now, Trump has already appointed an adviser, Stephen Miran, a member of the President's Advisory Council, to the Federal Reserve Board.At the last Fed meeting, Miran voted against a quarter rate cut because he wanted more aggressive cuts, according to minutes released a few weeks ago, and he did so again today.Powell tried to explain the difference.There are also different levels of risk tolerance.If you read the seven speeches, you will see that there are different views in the committee as far as what I said at the press conference.
"I think some members of the Fed to be an open committee, maybe it's time to think about market risk more. He also added:
Balance Sheet Shrinkage
Another item on the agenda for Wednesday's meeting was to set an end date for the Fed's balance sheet reduction program. During recent crises, especially during the pandemic, central banks have bought U.S. Treasuries and other mortgage-backed securities to ensure liquidity in the financial system during times of turmoil. But the Fed has been shrinking its balance sheet for two years in an effort to restore financial balance.
From 2022, it went from nine trillion dollars to 6.6 trillion.Powell has sent messages that he plans to bring the end of the program to the first quarter of 2026, but tensions in the markets have allowed analysts to speculate that it could end at that meeting.However, the Board of Governors warned that it will end in December of this year.
Your subscription is being used on another device
Want to add another user to your subscription?
If you continue to read this device, it will become unreadable.
ARRYYRYRYRONORRONORLETED is used in other or by El PINs that can be used from a single device.
If you want to share your account, change your subscription to Premium mode to add another user.Each of them will log in with their email address.email account that will allow you to customize your EL PAÍS experience.
Do you have a business subscription?Go here to sign up for more accounts.
If you do not know who is using your account, we recommend changing your password here.
If you decide to continue sharing your account, this message will appear on your device and on the devices of others who use your account indefinitely, affecting your reading experience.You can view the digital subscription terms and conditions here.
