Powell Signals No November Rate Cut as Inflation Cools, Dollar Rises

Federal Reserve Chair Jerome Powell signaled that the central bank is unlikely to cut interest rates at its November meeting, despite recent signs that inflation is easing. Speaking after the latest data showed consumer prices rising 2.4% year over year, Powell said the improvement is not yet sufficient to justify an immediate policy shift.

The remarks reinforced expectations that the Fed will keep borrowing costs unchanged for now as officials look for more evidence that inflation is moving sustainably toward the central bank’s 2% target. While the cooling price trend has strengthened the case for eventual easing, policymakers appear to want additional confirmation that inflation pressures are firmly under control.

Markets reacted quickly to Powell’s comments. The dollar index gained 0.5% against major currencies, reflecting investor confidence that U.S. interest rates will remain elevated in the near term. At the same time, futures markets continued to price in a high probability of a rate cut later in the year, with traders assigning about a 75% chance of a reduction in December.

The Fed’s next move will depend on incoming inflation, labor market, and growth data, all of which could shape the timing and pace of any policy easing.