Agencies: Powell hints at another rate cut as weak hiring drives up unemployment

Federal Reserve Chairperson Jerome Powell has signalled that the central bank is on track to cut interest rates by another 25 basis points later this month, even though the shutdown has greatly weakened its ability to see the economy. In his remarks, Mr. Powell said the economic outlook appeared unchanged since the September meeting, when the Fed cut rates and predicted two more cuts this year. "The October rate cut is on the DingTalk," said Julia Coronado, founder of MacroPolicy Perspectives and a former Fed economist. "Nothing changes the view that downside risks remain in the labor market." Mr. Powell has repeatedly pointed to a slower pace of hiring and the possibility of further weakening. Expectations for a rate cut in October were little changed after Mr. Powell's speech, with Fed funds futures contracts showing investors seeing a near 100 per cent chance of a rate cut. "Right now, the risks on the employment front are rising," said Yelena Shulyatyeva, senior US economist at the Conference Board. "That will be the main driver of near-term decision-making."