Powell challenges the market's idea of a Fed on autopilot

Core Insights - The Federal Reserve Chair Jerome Powell indicated that the decision for the next rate cut is not imminent, suggesting that the market's expectations may be overly optimistic [1][2][3] - Powell emphasized the uncertainty surrounding the Fed's future decisions, citing risks related to inflation and the labor market, and the lack of sufficient data due to the government shutdown [3][6][8] Group 1 - Powell stated that a further reduction in the policy rate at the December meeting is not guaranteed, which led to a negative reaction in stock markets and a spike in Treasury yields [2][5] - The Fed's previous projections indicated potential rate cuts in both October and December, but Powell's recent comments have raised doubts about this trajectory [5][6] - Powell highlighted the challenge of remaining data-dependent without access to comprehensive data, suggesting that insights from alternative sources may guide future decisions [6][8] Group 2 - Powell used a metaphor about driving in fog to illustrate the need for caution in decision-making, indicating that slowing down does not necessarily mean reducing rates [8]