Fed cuts rates, but hints end is near

Powell: US central bank ‘driving in fog’

- HOWARD SCHNEIDER

Fed Chair Jerome Powell announced that the Federal Reserve would cut interest rates by another quarter point on Wednesday, the second cut this year.REUTERS

(REUTERS)

A policy divide within the US central bank and a lack of federal government data may put another interest rate cut out of reach this year, Federal Reserve Chair Jerome Powell said on Wednesday, as he acknowledged the threats that officials see to the job market but also the risky nature of making further rate moves without a fuller picture of the economy.

The Fed on Wednesday cut interest rates by a quarter of a percentage point, as expected, as a way to temper any further weakening of the job market. But the central bank's new policy statement included several references to the lack of official data during a federal government shutdown, and Mr Powell told reporters later that policymakers are likely to become more cautious if it deprives them of further job and inflation reports.

“We're going to collect every scrap of data we can find, evaluate it and think carefully about it. And that’s our job,’ Mr Powell said in a news conference after a two-day policy meeting, as he ticked off private data the Fed can use, along with its own in-house surveys of business executives and less formal interviews with a range of contacts around the country.