Fed Chairman Powell faces questions about interest rate cuts, inflation and Trump

Fed Chairman Jerome Powell said he wasn't worried about the economy despite an inflation report that came in “slightly higher than expected.”

“In total, [we’re] “I feel good about economic activity,” he said. “At the same time, we received an inflation report…It wasn't terrible, but it was a little higher than expected.”

“By December we will have more data, I guess another employers report, two more inflation reports and lots of other data, and in December we will make a decision,” Powell continued.

—Sean Conlon

Byron Anderson, head of fixed income at Laffer Tengler Investments, said now is an opportune time for the Federal Reserve to back off its rate-cutting campaign.

“Unless there is a credit crunch, which is not apparent at the moment, the greater risk to markets will add fuel to an already inflationary environment,” he said. “Many will disagree, but this was the perfect time for the Fed to pause and reassess the situation before the end of the year.”

“Assuming the economy is doing well, inflation risks increase with every rate cut,” he added.

—Samantha Subin

Federal Reserve Chairman Jerome Powell said the central bank would monitor what is happening with the economy and inflation and adjust its policy accordingly.

“If the economy remains strong and inflation does not move sustainably towards 2%, we can reduce policy restraint more slowly. If the labor market unexpectedly weakens or inflation falls faster than expected, we can move more quickly,” Powell said in prepared remarks during the press conference.

“Policy is well placed to deal with the risks and uncertainties we face in pursuing both sides of our dual mandate,” he added.

—Sarah Min

Donald Trump's victory in the presidential election will have no direct impact on monetary policy, Fed Chairman Jerome Powell said on Thursday.

“In the short term, the election will have no impact on our policy decisions,” Powell said.

However, he expressed a caveat that any change in government could help influence Fed policy as the central bank seeks to lower interest rates.

“Fundamentally, it's possible that an administration's policies or policies put in place by Congress could have an economic impact over time,” he said. “Along with countless other factors, projections of these economic impacts would therefore be included and taken into account in our economic models.”

–Jeff Cox

Fed Chairman Powell stated that the US central bank has no concrete decisions for the future regarding further interest rate cuts.

“In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess the incoming data, the evolving outlook and the balance of risk,” Powell said at a news conference Thursday afternoon. “We are not on a set course. We will continue to make our decisions, session by session.”

—Lisa Kailai Han

Federal Reserve Chairman Jerome Powell spoke Thursday afternoon after the central bank decided to cut interest rates by a quarter point. He also explained the policymakers' rationale for the decision.

Fed Chairman Jerome Powell said the labor market was not a key driver of inflation.

“The labor market is not a source of significant inflationary pressure,” Powell said.

The Fed chairman said payroll growth has slowed in recent months while the unemployment rate has risen compared to a year ago. Overall, the labor market is less tight than just before the pandemic, but still “solid,” he said.

—Alex Harring

The central bank's move came as expected – and it will likely continue to take a measured approach going forward, said Greg McBride, chief financial analyst at Bankrate.

“The Federal Reserve continues to take its foot off the brake pedal, cutting interest rates by a quarter of a percentage point, as expected,” he said. “The solid pace of economic growth means the Fed can abandon the urgency of cutting interest rates by half a percentage point in September and adopt a more deliberate quarter percent pace of this and future rate cuts.”

However, he noted that the recent rise in Treasury yields is dampening the impact of the rate cut.

“The sharp rise in mortgage rates from 6.2% to 7% over the last seven weeks hits harder than a quarter percentage point drop in credit card rates,” McBride added.

—Darla Mercado

Fed Chairman Powell will likely face questions from reporters at the 2:30 p.m. ET news conference about the impact of tax and spending proposals promised in the new Trump administration, which takes office in January.

As president, Donald Trump frequently railed against the Fed and Powell. In 2019, for example, he criticized the central bank several times, once saying it was a bigger obstacle to American prosperity than China.

– Scott Schnipper

The three major averages were little changed after the Federal Reserve announced its expected quarter-point interest rate cut.

The S&P 500 was last up nearly 0.7% around 2:10 p.m. ET, while the Nasdaq Composite was up 1.4%. The Dow Jones Industrial Average flickered near the flat line and rose about 15 points.

— Darla Mercado

As of 1:50 p.m. ET, the S&P 500 was up 0.6%, while the Nasdaq Composite was up 1.3%. The Dow Jones Industrial Average was near zero.

The 10-year Treasury yield fell 8 basis points to 4.34%. The two-year Treasury yield was 4.2%, down 6 basis points.

— Darla Mercado

According to James Ragan, director of asset management research at DA Davidson, Fed officials' current view of the labor market could be one of the key takeaways from Powell's news conference on Thursday.

“The biggest thing he can talk about is the job market because we had these hurricane impact numbers for October. Obviously a weak number, but I think the markets have neglected it badly due to the impact of the hurricane. So I'd like to hear it.” “We're talking a little bit beyond that data,” Ragan told CNBC.

The nonfarm payrolls report for October showed a gain of just 12,000 jobs. However, according to the Bureau of Labor Statistics, storms and a now-decided strike by Boeing workers may have temporarily lowered that number.

–Jesse Pound

With the Federal Reserve expected to deliver a quarter-point interest rate cut on Thursday, the most important event for markets will likely be Chairman Jerome Powell's press conference at 2 p.m. ET.

Traders will be looking for clues from Powell on the future course of interest rate policy. Trading in Fed fund futures suggests about a 63 percent chance the central bank will make another quarter-point interest rate cut in December, but traders are also weighing the likelihood that policymakers could skip this month.

With Donald Trump heading to the White House for the second time this week, the central bank faces even more complexity. That's because the new administration's plans include tax cuts and tariffs that could impact the Fed's steps to curb inflation.

Read more about the Fed's November meeting from CNBC's Jeff Cox here.

— Darla Mercado

The Federal Reserve is widely expected to cut interest rates by a quarter point on Thursday, taking another step toward easing its restrictive policies.

To that end, consumer interest rates have moved significantly since the Fed began its rate-hiking campaign in March 2022, and in some parts of the market, interest rates have cooled slightly since the central bank made its first half-percentage-point rate cut in September.

According to Bankrate, the interest rate on a $30,000 home equity line of credit is 8.7% as of the week of November 1st. That's down from 9.25% for the week of September 13, but still significantly higher than the 4.27% rate in March 2022.

According to the bank rate, credit card interest rates were at 20.5% last week, significantly higher than the 16.34% in March 2022. However, they are slightly lower compared to the previous month's rate of 20.78%.

The interest rate for a 30-year fixed-rate mortgage was 7.09% in the week of November 1st, significantly higher than the 4.29% in March 2022. However, it is also higher than the week of September 13th, when the Interest rate still at 4.29% was 6.12%.

That's because mortgage rates loosely follow this Yield on 10-year government bondswhich has recently seen an increase. In fact, the benchmark return was 4.363% for the week of November 1, well above the 3.649% it was trading at in mid-September.

— Darla Mercado, Nick Wells

Traders went into Thursday's Fed meeting confident that a rate cut was imminent, but increasingly uncertain about what would happen in December.

The Fed funds futures market suggested a 100 percent chance that policymakers would ease monetary policy, with only a slim chance that the cut could reach half a percentage point in September. According to CME Group's FedWatch tracker for 30-day fed funds futures contracts, the market's implied odds of a quarter-point move were about 99%.

In December, the probability of a break increases and is at 32.6% as of Thursday lunchtime, an increase of around 8 percentage points compared to the previous week. If the Fed doesn't skip December, the probability of it happening in January is about 68%, the CME indicator shows.

–Jeff Cox