Overview

• Speaking in Philadelphia, Jerome Powell said downside risks to employment have increased even as inflation stays near 3%.
• Powell emphasized a meeting-by-meeting approach and noted no change in the broad outlook since the September quarter-point cut.
• Markets price roughly a 96%–97% chance of a cut on Oct. 28–29, with odds also elevated for another reduction in December.
• With the jobs report delayed by the shutdown, the Fed is relying on private indicators and Reserve Bank contacts; the CPI report is set for Oct. 24.
• Powell said recent goods-price gains mainly reflect tariffs and signaled the end of balance-sheet runoff could come into view in the coming months.