Ankara: The US Federal Reserve Chair Jerome Powell expressed doubts Wednesday about a further policy rate cut at the central bank's December meeting, contrary to market expectations, saying it "is not a foregone conclusion, far from it."

According to Anadolu Agency, Powell highlighted the differing views within the committee during the recent meeting, emphasizing the uncertainty surrounding the decision for a rate cut in December. He stated that while the central bank will continue to obtain economic information despite the ongoing federal government shutdown, the high level of uncertainty could influence the outcome of the December meeting. Powell noted the importance of the limited data available, such as the Beige Book, to assess the economic situation.

The Federal Reserve recently cut the federal funds rate by 25 basis points to a range of 3.75% to 4%, aligning with expectations and signaling potential risks to employment. Powell pointed out evidence of a softer labor market due to the government shutdown, with delayed official employment data for September. He indicated that layoffs and hiring remain low, and perceptions of job availability and hiring difficulty have declined.

Prior to the shutdown, US non-farm payrolls increased by 22,000 jobs in August, falling short of expectations, while the unemployment rate rose slightly to 4.3%. In September, private sector employment saw a decrease of 32,000 jobs, contrary to predictions of growth.

Powell also addressed inflation, noting that the annual rate, excluding the impact of tariffs, is close to the central bank's 2% target. He explained that the core personal consumption expenditures (PCE) price index, the Fed's primary inflation indicator, includes a significant portion of tariffs, estimating core PCE to be between 2.3% and 2.4% without tariffs. The consumer price index (CPI) in the US rose 3% annually in September, with a monthly increase of 0.3%, both below market expectations.

Regarding economic growth, Powell stated that available data suggests a firmer trajectory than anticipated, driven by stronger consumer spending. The US economy grew 3.8% in the second quarter, surpassing expectations and marking the strongest expansion since the third quarter of 2023.

Powell warned that the ongoing government shutdown would "weigh" on the economy, though he anticipated these effects would reverse once the shutdown ends. The Congressional Budget Office estimated that the shutdown could cost the economy between $7 billion and $14 billion, potentially reducing fourth-quarter GDP by up to 2% due to decreased spending.