Powell Hints at Possible Rate Cuts Amid U.S. Hiring Slowdown

Federal Reserve Chair Jerome Powell signaled the possibility of two additional quarter-point interest rate cuts by the end of 2025, citing concerns over a slowdown in U.S. hiring. Speaking at the National Association for Business Economics annual meeting in Philadelphia on October 14, 2025, Powell emphasized the Federal Reserve's commitment to supporting economic growth amid emerging vulnerabilities.

Powell highlighted that while the U.S. economy has shown signs of resilience, the labor market remains stagnant, with low levels of both hiring and firing. He noted that the Federal Reserve would adopt a cautious, meeting-by-meeting approach to interest rate decisions, balancing the risks of persistent inflation against labor market softness.

The Federal Reserve had already reduced rates once this year and is expected to cut rates further to lower borrowing costs and bolster economic activity. Powell indicated that the end of the Federal Reserve's balance sheet reduction, known as quantitative tightening, might be approaching.

The ongoing government shutdown has delayed critical economic reports, including the Labor Department's monthly inflation data, complicating the Federal Reserve's ability to assess economic conditions. Despite these challenges, Powell emphasized that the broader employment and inflation outlook remains consistent with prior projections.

Market reactions to Powell's remarks were mixed. Global stock markets experienced a modest rebound, driven by reassurances from Powell and strong earnings from major U.S. banks. However, technology shares lagged, dragging the Nasdaq lower. Gold prices surged to a record $4,217 per ounce, up nearly 60% in 2025, as investors sought safety amid economic uncertainties.

The Federal Reserve's proactive stance in addressing economic challenges, particularly in the labor market, underscores its commitment to supporting economic growth through monetary policy adjustments. As the central bank navigates the complexities of balancing inflation control and employment stability, its decisions will have significant implications for both domestic and global economic landscapes.