US Fed in no rush to cut rates – analysts

Latest comments from US Federal Reserve’s (Fed) chairman Jerome Powell have indicated that the central bank is in no rush to cut interest rates, according to oil market analysts.  

PHOTO: US Fed's headquarters in Washington DC. Getty Images

In his speech at the National Association for Business Economics Annual Meeting in Nashville, Tennessee, Powell emphasised that the country's economic growth has improved significantly, with headline inflation nearing the Fed’s 2% target. “Longer-run inflation expectations remain well anchored,” Powell said.

Powell’s comments have prompted the market to expect another 25-basis points interest rate cut in December, analysts from Saxo Bank said.

Higher interest rates can dampen demand as it makes dollar-denominated commodities like oil costlier for holders of other currencies.

In September, the US Fed cut its key interest rate by half a percentage point for the first time since 2020, bringing the central bank’s benchmark rate to a range between 4.75-5.00%.

Powell’s latest comments “appeared more hawkish,” SPI Asset Management’s managing partner Stephen Innes remarked. “Fed Chair Powell's latest remarks reaffirmed that the US central bank is in no rush to cut interest rates, even as it moves gradually toward a more neutral stance,” he added.

By Aparupa Mazumder

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