The Fed Finally Cut Rates—Now What? Powell Could Offer Clues on Tuesday.

Federal Reserve Chair Jerome Powell will give a prepared speech and take questions on Tuesday. (Getty Images)

Key Points

About This Summary

• Jerome Powell will speak about the U.S. economy at the Greater Providence Chamber of Commerce on Tuesday.
• Investors seek clues on monetary policy after last week’s quarter percentage point rate cut, now at 4.00%-4.25%.
• The Fed forecasts three cuts in 2025, but a 10-9 split among policymakers reveals uncertainty about the path ahead.

Federal Reserve Chair Jerome Powell will deliver remarks on the U.S. economy Tuesday at an event hosted by the Greater Providence Chamber of Commerce, just one week after the central bank approved its first interest-rate cut of 2025.

Powell is scheduled to speak at 12:35 p.m. Eastern Time during the chamber’s economic luncheon in Warwick, R.I. A question-and-answer session will follow his prepared remarks.

Investors will be watching closely for any clues as to how the Fed views the path of monetary policy after last week’s decision to trim its benchmark rate by a quarter percentage point, to 4.00%-4.25%. The move was aimed at supporting growth amid signs of softening labor markets.

During his press conference following last week’s policy decision, Powell made clear that the rate cut should not be interpreted by markets as the start of aggressive easing.

“You could think of this in a way as a risk management cut,” he said at his press conference, signaling that further moves would be cautious and data-dependent.

That cautious stance showed up in the Fed’s own projections.

The updated “dot plot” forecasts three cuts in 2025, up from two in June, but the outlook reveals deep uncertainty among policymakers. The median forecast masks a razor-thin 10-9 split among the 19 participants, what economists call a “soft median” that suggests little consensus about the path ahead.

Powell also reinforced on Wednesday that the central bank wouldn’t be swayed by political pressure.

“We are doing our work exactly how we always have now,” he said. “People are having their arguments, and we’re having a great discussion about these issues.”

Write to Nicole Goodkind at nicole.goodkind@barrons.com