• Federal Reserve Chair Jerome Powell indicates the central bank's economic assessment remains largely unchanged from its September meeting.
  • Markets continue to price in near-certain rate cuts for October and December, despite core inflation persisting above the Fed's 2% target.
  • Powell emphasizes a data-dependent approach, balancing slowing job growth against persistent price pressures.

Federal Reserve Chair Jerome Powell signaled Tuesday that the U.S. central bank's economic outlook has seen little material change since policymakers last met in September, suggesting a steady course for monetary policy as markets await potential interest rate cuts.

Speaking at an economic forum, Powell noted that while recent data shows some moderation in job growth, the overall economic picture hasn't shifted dramatically enough to alter the Fed's fundamental approach. "The outlook hasn't changed much since our September meeting," Powell said, according to people familiar with his remarks. "We're continuing to monitor the data closely."

The comments come at a delicate moment for policymakers, who are balancing slowing economic momentum against inflation that remains stubbornly above their 2% target. Core inflation stood at 3.1% in the most recent reading, presenting what Powell has previously called "the last mile" challenge in the inflation fight.

Traders appear undeterred in their expectations for policy easing. Market pricing, based on CME FedWatch data, indicates a 97% probability of a 25-basis-point cut at the October meeting, with an 89% chance of another reduction by year-end. The Fed's preferred inflation gauge has shown only modest improvement in recent months, keeping policymakers cautious about declaring victory.

"We remain data-dependent," Powell emphasized during his appearance, echoing language that has become a hallmark of his communications strategy. This approach means the Fed could adjust its stance if economic conditions warrant, but for now, the central bank appears content with its current policy settings.

Attempts to reach Fed officials for additional comment on the timing of potential rate moves were unsuccessful Tuesday afternoon. A spokesperson for the Federal Reserve Board declined to elaborate beyond Powell's published remarks.

Market reaction to Powell's comments was muted, with major stock indices showing little change in afternoon trading. The U.S. Dollar Index held steady against a basket of currencies, while Treasury yields remained within recent ranges.

The Fed's next policy meeting concludes November 6, though most analysts expect the central bank to hold rates steady at that gathering before potentially cutting in October. Powell's remarks suggest the Fed wants to avoid surprising markets while maintaining flexibility to respond to economic developments.

Correction: An earlier version of this article misstated the timing of the Fed's next policy meeting. It concludes November 6, not November 7.