During a December press briefing, Federal Reserve Chair Powell stated that the latest central bank projections do not fully reflect the underlying fundamentals, implying the next move is unlikely to be a rate hike. He added that a rise in policy rates should not be viewed as the baseline path in the near term, signaling a data-driven approach as the committee weighs the trajectory of policy. He further remarked, “I don’t think a rate hike is anyone’s baseline expectation.”

Looking ahead, Powell indicated that interest rates may remain unchanged in the short run, underscoring a cautious monetary policy stance. The market will scrutinize incoming data on inflation and growth as officials prioritize stability over aggressive tightening. By signaling patience, the Fed aims to balance macroeconomic normalization with the risk of overheating, aligning communications with a measured policy path.