Jerome Powell flag inflation risks if interest rates 'too aggressive' are cut - 5 key emphasis from his speech

Jerome Powell speech: Jerome Powell, chairman of the US Fed, said in his first speech after the Federal Open Market Committee (FOMC) interest rate cut that if the central bank lowers its benchmark rate ‘too aggressively’, it poses an inflation risk in the US economy. The US Fed’s FOMC on Wednesday, September 17, 2025, decided to reduce the most important interest rate by 25 BPS to a series of 4.00% to 4.25%. The committee further said that they would continue to judge the incoming data, the developing prospects, along with the balance between risks to decide whether more rate cuts are needed in the US economy. Here are five important highlights from Powell’s speech 1. Inflation risk: In his speech on Tuesday, September 23, 2025, Jerome Powell said that if the Fed lowered its rates too quickly, it would leave the task of containing inflation unfinished to bring it under the target range of the central bank. “If we facilitate too aggressively, we can leave the inflation track incomplete and later reverses the course to fully recover 2% inflation,” Powell said in his speech. However, Powell, who attributed his recent rate reduction, added that if the Fed maintains a ‘restrictive policy’ for too long, it can mitigate the US economy’s labor market unnecessarily. This attitude sheds light on how the central bank faces a double challenge for its position. 2.. What is the following for our Fed: Powell also said that the FOMC will draw their attention to the review of data carefully to understand if the policy’s attitude is moving on the right path. The upcoming Federal Reserve meeting will be held from October 28 to October 29, 2025, according to the official data. “We will examine the data very carefully, labor market data, growth, inflation data, amounts of data we get, and ask us, the policy is in the right place,” Powell said in his speech. Investors are now focusing on the next US meeting in the coming month in the hope of another possible rate cut for the US economy. 3.. On Rates Impact: Powell also emphasized that the US government raises a ‘good income’ from the rates imposed on world countries. “We are now collecting a good income, government support, the federal government that has a good part of revenue, $ 300-400 billion a year. According to the Fed chairman, retailers and importers will not leave the impact of consumer rates, which keep inflation at a moderate stage.” The actual effects on inflation were therefore very modest in the authorities, which is a small amount, “says Powell. Powell expects US inflation to return to the non-tariff level next year to the one-time rise due to the US rates imposed by the government. to weigh the country. Resilience shows in the midst of the material changes in the federal government’s trade and immigration policy. Read all stories by Anubhav Mukherjee Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or brokerage companies, not coin. We advise investors to check with certified experts before making investment decisions.