Powell Indicates Shift in Rate Cut Policy

The Chair of the Federal Reserve Jerome Powell announced the future track for rate cuts in the United States.

Fed Chair Jerome Powell.

Powell said in a statement on Tuesday that "We [the Fed] do not need to be in a hurry." (Full statement: "With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance.")

The Fed, in recent weeks, has become more concerned over forced rate cuts as the newly inaugurated president Donald Trump has made campaign promises for low interest rates, even if the Fed may not comply. However, the president does not have the intention of terminating the position which Powell holds, hoping to work with him instead over the next four years to enact policy changes.

However, with Powell's intention of keeping rates high, his own opinions may conflict with the President's. Most importantly, these ideas may conflict with the interests of investors, who would prefer a strong rate cut as early as this month to stimulate economic development through cheaper borrowing.

Stocks on Tuesday plummeted following Powell's statement. The S&P is down 0.1%, and the Nasdaq is similarly down 0.3%.

Developing news.