Federal Reserve Chair Jerome Powell gave no indication that future interest rate cuts are coming, despite mounting pressure from President Donald Trump and Trump-appointed officials for the central bank.
Speaking to more than 500 business, nonprofit and political leaders at The Crowne Plaza in Warwick Tuesday, Powell emphasized the need for a cautious approach to monetary policy in the midst of the unique challenge presented by persistent inflation and a softening labor market.
“There is no risk-free path,” said Powell. “If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2%. “If we maintain restrictive policies for too long, the labor market could soften unnecessarily. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate.”
Powell’s comments during the Greater Providence Chamber of Commerce’s annual economic outlook luncheon marked his first public speech since the Federal Reserve cut interest rates by 25 basis points last week. Even after the modest rate cut — the first of the year — other central bank officials indicated they support Trump’s push for faster and more aggressive rate cuts to tackle inflation. Stephen Miran, Trump’s economic adviser and a new appointee to the Federal Reserve Board of Governors, said Monday that the 4.1% interest rate was still too high. Michelle Bowman, another Trump appointee and vice chair for supervision, also backed speedy and swift rate cuts in separate remarks in North Carolina earlier Tuesday.
Yet Powell, also a Trump appointee in 2018 and then reappointed for a second term under President Joe Biden, made no promises on future rate cuts.
“Our policy is not on a preset course,” Powell said, emphasizing the Federal Reserve’s dual mandate to maximize employment while keeping inflation at or near 2%. “We will continue to determine the appropriate stance based on the incoming data, the evolving outlook, and the balance of risks.”
Powell’s data-driven mindset over monetary policy has caused tensions with Trump, who since winning a second term has called Powell names and threatened to fire him amid frustrations at the Fed’s decision to keep interest rates steady.
Powell has remained unflappable in the face of personal attacks. He responded indirectly Tuesday without calling out Trump by name.
“Most of the people who are calling us political, it’s just a cheap shot,” Powell said. “Our argument is doing our jobs. We don’t get into the back and forth with external people.”
U.S. Sen. Jack Reed, who introduced Powell to the sold-out crowd Tuesday, was less reserved in his criticism of the federal administration, blasting Trump for his “direct assault” on the central bank’s independence and its members.
“Chair Powell has met these challenges with equanimity and professionalism,” Reed said. “He has somehow managed to stay laser-focused on achieving the Fed’s dual mandate of maximum employment and stable pricing.”
Indeed, Powell focused much of his opening address and question-and-answer session with Laurie White, president of the Providence chamber, on the mechanics behind the central bank’s decisions. He rattled off a list of economic indicators that inform the Federal Reserve’s approach: inflation and the labor market chief among them, but also financial markets, housing affordability and tariffs.
Rhode Island U.S. Sen. Jack Reed (right) praised Federal Reserve Chair Jerome Powell for his professionalism at the Greater Providence Chamber of Commerce economic outlook luncheon on Tuesday, Sept. 23, 2025. (Photo by Michael Salerno/Rhode Island Current)
Explaining the rate cut
The softening of the labor market, evidenced by a rising unemployment rate and depressed job growth, prompted the central bank’s decision to lower interest rates slightly, easing off the “tight” monetary policy it has maintained in the face of inflation through much of the year.
However, Powell noted that other labor market signals remain stable, including the ratio of job openings to unemployment, while inflation remains elevated. “We took very much a risk management approach,” he said of the most recent rate cuts. “We try to have a policy that can cover the range of plausible outcomes, not just one outcome.”
It’s the attitude that guided Powell, a D.C. native, through a career in finance, first as an investment banker and lawyer in New York before working for the U.S. Department of the Treasury under President George H. W. Bush, and, since 2012, as a member of the Federal Reserve’s Board of Governors.
But the economic highs and lows have sharpened in the five years since Powell last visited Rhode Island. Soon after his November 2019 visit, also as part of a Greater Providence Chamber of Commerce event, the COVID-19 pandemic took hold, its grip on the world’s health and economy still lingering today.
“In democracies around the world, public trust in economic and political institutions has been challenged,” Powell said. “Those of us who are in public service at this time need to focus tightly on carrying out our critical missions to the best of our ability in the midst of stormy seas and powerful crosswinds.”
Especially under a federal administration whose trade wars and immigration policies created what Powell characterized as an “unusual and challenging” slowdown in supply of and demand for workers.
“It’s really an unusual kind of balance, the lower demand and lower need for workers,” Powell said.
He stressed that the central bank’s control of interest rates is its only tool, and that upheaval of the economy caused by artificial intelligence and structural labor force shifts were better solved through legislators and the private sector.
“We get a disproportionate amount of attention compared to the things that really matter, which are the things that Congress can do and the private sector can do,” Powell said.
Stocks started to slide after Powell spoke, with all major index averages falling. The S&P 500 was down more than 36 points when markets closed.
U.S. Rep. Seth Magaziner and a host of state legislative and general officeholders, including House Speaker K. Joseph Shekarchi, Lt. Gov. Sabina Matos and General Treasurer James Diossa, also attended the Chamber event Tuesday. Gov. Dan McKee was not present, having appeared at a joint event in New London, Connecticut, with Gov. Ned Lamont to speak about offshore wind an hour earlier.
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Rhode Island Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Rhode Island Current maintains editorial independence. Contact Editor Janine L. Weisman for questions: info@rhodeislandcurrent.com.