Federal Reserve Chair Jerome Powell signaled Monday that more interest rate cuts are in the pipeline but suggested they would occur at a measured pace intended to support a still-healthy economy.

His comments, at a conference of the National Association for Business Economics in Nashville, Tenn., disappointed the hopes of many investors that the Fed would implement another steep half-point reduction in its key rate before the end of the year. The Fed cut its rate by a larger-than-usual half point earlier this month as it has moved past its inflation fight and pivoted toward supporting the job market.

The broad S&P 500 stock index initially fell 0.6% after his remarks, but recovered afterwards to close about 0.4% higher.

“We’re looking at it as a process that will play out over some time,” Powell said during a question and answer session, referring to the Fed’s interest rate reductions, “not something that we need to go fast on. It’ll depend on the data, the speed at which we actually go.”

Economists are already pointing to this coming Friday’s jobs report as a key piece of data that could alter the Fed’s policy path. If the unemployment rate rises noticeably or hiring stumbles, officials could consider a sharper rate cut later this year.

At their last meeting Sept. 18, Fed officials reduced their rate to 4.8%, from a two-decade high of 5.3%, and penciled in two more quarter-point rate cuts in November and December. On Monday, Powell said that remains the most likely outcome.

“If the economy performs as expected, that would mean two more cuts this year,” both by a quarter-point, Powell said.

In prepared remarks, Powell said the U.S. economy and hiring are largely healthy and emphasized that the Fed is “recalibrating” its key interest rate, as opposed to cutting rapidly as it would in an emergency.

He also said the rate is headed “to a more neutral stance,” a level that doesn’t stimulate or hold back the economy. Fed officials have pegged the so-called “neutral rate” at about 3%, significantly below its current level.

Powell emphasized that the Fed’s current goal is to support a largely healthy economy and job market, rather than rescue a struggling economy or prevent a recession.

“Overall, the economy is in solid shape,” Powell said in written remarks. “We intend to use our tools to keep it there.”

Inflation, according to the Fed’s preferred measure, fell to just 2.2% in August, the government reported Friday. Core inflation, which excludes the volatile food and energy categories and typically provides a better read on underlying price trends, ticked up slightly to 2.7%.

The unemployment rate, meanwhile, ticked down last month to 4.2%, from 4.3%, but is still nearly a full percentage point higher than the half-century low of 3.4% it reached last year. Hiring has slowed to an average of just 116,000 jobs a month in the past three month, about half its pace a year ago.

Over time, the Fed’s rate reductions should reduce borrowing costs for consumers and businesses, including lower rates for mortgages, auto loans, and credit cards.

“Our decision ... reflects our growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate economic growth and inflation moving sustainably down to 2%,” Powell said.

— Associated Press

Verizon outages vex customers across U.S.

Some Verizon customers across the U.S. were hit by a service outage Monday.

The issue appeared to knock out cellphone service for tens of thousands of Verizon users. Data from outage tracker DownDetector shows that reports topped 100,000 shortly after 11 a.m. ET — and while that number dropped significantly, nearly 48,000 were still facing issues closer to 4 p.m. ET.

Frustrated users online shared that they didn’t have service in many parts of the country — including the Southeastern U.S., where residents are still reeling from the aftermath of Hurricane Helene. But the outage wasn’t isolated to one region. DownDetector’s map also showed many reports coming from the West Coast, Midwest and Northeast.

A statement from New York-based Verizon confirmed the issue with its network and apologized “for any inconvenience some of our customers experienced today.” The company added while service has been restored for many customers, its engineers are continuing to work to fully resolve this issue.

The Federal Communications Commission also acknowledged the outage later in the day, but didn’t provide further details beyond saying it was looking to determine the cause.

Stellantis cuts earning forecast, citing costs

Carmaker Stellantis, the world’s fourth largest carmaker, slashed its earnings forecast on Monday, citing investments to turn around its U.S. operations amid a wider industry slump and increased Chinese competition.

Stellantis said it was accelerating efforts to turn around North America, including bringing dealer inventory levels to no more than 300,000 vehicles by the end of the year, instead of the first quarter of 2025 as previously planned.

The action is in the back of a decrease in shipments of 200,000 vehicles in the second half of this year compared with a year earlier, twice as many as the company had forecast. The company will offer higher incentives on 2024 and older models.

In its profit warning, Stellantis said it expected to finish the year with a negative cash flow of 5 billion euros to 10 billion euros, ($5.6 billion to $11.2 billion) instead of positive.

— From news services