Powell warns of hiring slowdown as Fed signals more rate cuts ahead

A sharp slowdown in hiring poses a growing risk to the U.S. economy, Federal Reserve Chair Jerome Powell warned — a clear signal that the central bank is likely to cut interest rates two more times before the end of the year.

In a prepared speech delivered at the National Association of Business Economics (NABE) annual meeting in Philadelphia, Powell acknowledged that the recent federal government shutdown has disrupted the release of official economic data. Still, he noted that “the outlook for employment and inflation does not appear to have changed much since our September meeting,” when the Fed implemented its first rate cut of the year.

At that meeting, Fed policymakers projected two additional 25-basis-point cuts before year-end, reflecting growing concern over weakening labor market momentum and the potential impact on consumer spending.

Powell’s remarks suggest that the central bank remains cautious about balancing the risks of slowing job growth with its goal of keeping inflation close to the 2% target. Analysts say that further rate cuts could help stabilize the labor market and sustain economic growth, especially as businesses show signs of slowing hiring amid higher borrowing costs and global uncertainty.

While Powell avoided specifying exact timing for the next moves, his tone indicated that the Fed stands ready to act if the job market continues to lose steam — reinforcing expectations that monetary policy will remain on a gradual easing path through the end of 2025.