The Fed megaphone: Powell believes rates are still tight, opening up room for further rate cuts.

"Fed Whisperer" Nick Timiraos' latest article: Federal Reserve Chairman Powell stated that even after last week's rate cut, he still believes the Fed's rate stance is "still slightly tight", which means that if officials continue to judge that recent labor market weakness outweighs inflation setbacks, there is still more room for rate cuts this year. Powell largely reiterated his views at the press conference after last week's rate cut. He emphasized the challenges the Fed faces in achieving its two major goals of maintaining low inflation stability and promoting a healthy labor market. Powell said, "Two-way risks mean there is no risk-free path, cutting rates too much and too quickly could lead to inflation approaching 3% rather than the Fed's 2% target, while maintaining a restrictive policy stance for too long could unnecessarily weaken the labor market." Powell also reiterated his view that the slowdown in job growth this summer makes last week's policy shift necessary to focus more on the labor market than earlier this year. The slightly tight rate setting puts the Fed in a favorable position to respond to potential economic developments.