Central bankers are rarely known for theatrics, but the tone from Jerome Powell on Tuesday was notably measured.
Speaking in Rhode Island, the Federal Reserve chair warned against moving too quickly on interest rate cuts, even as some of his colleagues clamour for sharper action.
Powell argued that the Fed faces a delicate balancing act: trim borrowing costs too aggressively and risk reigniting inflation, or hold rates too high and further weaken the labor market.
His comments follow last week’s decision to lower the benchmark rate, the first reduction this year, but he offered no signal of an accelerated pace.
By contrast, Fed governor Michelle Bowman said earlier in the day that inflation was easing while jobs growth was faltering, conditions that in her view demand faster cuts.
Stephen Miran, another policymaker linked to Donald Trump, has also pressed for rates to fall towards 2–2.5%.
Other officials, including Chicago Fed president Austan Goolsbee, have backed Powell’s more restrained approach. The split highlights widening divisions at the U.S. central bank over how best to steer the economy.