Powell says Fed will go cautiously on rate cuts

WASHINGTON — Federal Reserve Chair Jerome Powell signaled a cautious approach Tuesday to future interest rate cuts, in sharp contrast with other Fed officials this week who called for a more urgent approach.

In remarks in Providence, Rhode Island, Powell noted that there are risks to both of the Fed's goals of seeking maximum employment and stable prices. But with the unemployment rate rising, he noted, the Fed agreed to cut its key rate last week. Yet he did not signal further cuts on the horizon.

If the Fed were to cut rates "too aggressively," Powell said, "we could leave the inflation job unfinished and need to reverse course later" and raise rates. But if the Fed keeps its rate too high for too long, "the labor market could soften unnecessarily," he added.