Powell says the Fed doesn’t need to be ‘in a hurry’ to cut interest rates.

Federal Reserve Chair Jerome Powell said on Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to cut interest rates.

“The economy is not sending a signal that we need to be in a rush to cut rates,” Powell said in remarks to business leaders in Dallas. “The strength we’re seeing in the economy right now gives us the ability to make our decisions carefully.”

(Watch Powell’s remarks live here.)

In an upbeat assessment of the current situation, the central bank chief described the country’s growth as “the best ever in any major economy in the world”.

Specifically, he said the labor market held up well despite a disappointing October job growth that he attributed to storm damage and labor strikes in the Southeast. Nonfarm payrolls increased by only 12,000 for the period.

Powell noted that the unemployment rate has been rising but has declined in recent months and is low by historical standards.

On the question of inflation, he cited developments that have been “broad-based,” noting that Fed officials expect it to continue to retreat toward the central bank’s 2% target. However, inflation data this week showed modest increases in both consumer and producer prices, with 12-month rates moving further away from the Fed mandate.

Still, Powell said the two indexes point to an inflation rate of 2.3 percent from the Fed’s preferred move in October, or 2.8 percent excluding food and energy.

“Inflation is getting very close to our 2 percent long-term goal, but it’s not there yet. We’re committed to finishing the job,” said Powell, who noted that getting there has been “a tough road at times. “Maybe.

Powell’s cautious view of rate cuts sent stocks lower and Treasury yields higher. Traders also lowered their expectations for a December rate cut.

The remarks came a week after the Federal Open Market Committee cut the central bank’s benchmark borrowing rate by a quarter of a percentage point, pushing it to a range between 4.5% and 4.75%. This was followed by a drop of half a point in September.

Powell described the move as an overhaul of monetary policy that no longer focused primarily on curbing inflation and now aims to balance the labor market as well. Markets still largely expect the Fed to cut another quarter point in December and then a few more in 2025.

However, Powell was unflinching when it came to delivering his predictions. The Fed is trying to guide its key rate to a neutral setting that neither boosts nor inhibits growth, but it is not sure what the end point will be.

“We believe that with an appropriate recalibration of our policy stance, strength in the economy and labor market can be maintained, with inflation coming down steadily to 2 percent,” he said. “We are moving policy over time to a more neutral setting. But the path to get there is not predetermined.”

Powell added that moving to a neutral rate would be difficult to calculate.

“We are navigating between the risk that we move too fast and the risk that we move too slowly. Inflation will come down,” he said. “So going a little slower, if the data allows us to go a little slower, seems like a great thing.”

The Fed is also allowing income from its bond holdings to roll off its large balance sheet each month. There are no indications as to when the process might end.