{"id":53514,"date":"2025-09-23T13:08:47","date_gmt":"2025-09-23T17:08:47","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/powell-signals-caution-amid-economic-slowdown-and-shifting-risks-iran-reaffirms-nuclear-stance\/53514\/"},"modified":"2025-09-23T13:08:47","modified_gmt":"2025-09-23T17:08:47","slug":"powell-signals-caution-amid-economic-slowdown-and-shifting-risks-iran-reaffirms-nuclear-stance","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/powell-signals-caution-amid-economic-slowdown-and-shifting-risks-iran-reaffirms-nuclear-stance\/53514\/","title":{"rendered":"Powell Signals Caution Amid Economic Slowdown and Shifting Risks, Iran Reaffirms Nuclear Stance"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Federal Reserve Chair Jerome Powell<\/strong> indicated that the recent <strong>25 basis point rate cut<\/strong> was a &quot;risk management&quot; move, acknowledging a &quot;challenging situation&quot; with rising downside risks to employment despite persistent, albeit somewhat elevated, inflation.<\/li>\n<li>The U.S. economy is experiencing <strong>&quot;slight growth&quot; but &quot;not rapidly,&quot;<\/strong> with consumer spending moderating and a &quot;less dynamic&quot; and &quot;somewhat softer&quot; labor market, where job gains have slowed significantly.<\/li>\n<li>Powell reiterated that <strong>tariff-related inflation is likely to be &quot;short-term&quot;<\/strong> and a &quot;one-time shift in the price level,&quot; while long-term inflation expectations remain anchored near the Fed&#39;s 2% target.<\/li>\n<li>Iran&#39;s Supreme Leader Ayatollah Ali Khamenei stated that <strong>Iran &quot;Do Not Need Nuclear Weapons, And Do Not Intend To Produce Them,&quot;<\/strong> a declaration made amidst renewed international scrutiny.<\/li>\n<\/ul>\n<p>Federal Reserve Chair Jerome Powell delivered a cautious assessment of the U.S. economic outlook today, emphasizing a delicate balance between inflation risks and a softening labor market. Speaking at the Greater Providence Chamber of Commerce, Powell characterized the economy as experiencing &quot;slight growth&quot; but &quot;not rapidly,&quot; with notable moderation in consumer spending and business uncertainty affecting future expectations.<\/p>\n<h3>Monetary Policy and Economic Headwinds<\/h3>\n<p>Powell&#39;s remarks follow the Federal Open Market Committee&#39;s (FOMC) decision last week to cut the federal funds rate by <strong>25 basis points<\/strong> to a range of <strong>4%-4.25%<\/strong>, the first reduction since December 2024. He described this move as a &quot;risk management cut&quot; and &quot;another step toward a more neutral policy stance,&quot; necessitated by increased &quot;downside risks to employment.&quot;<\/p>\n<p>The labor market, according to Powell, is &quot;less dynamic&quot; and &quot;somewhat softer,&quot; with an &quot;unusual and challenging decline&quot; in both worker supply and demand. The unemployment rate edged up to <strong>4.3% in August<\/strong>, and payroll job gains have slowed significantly to an average of just <strong>29,000 per month<\/strong> over the past three months. Powell noted that this slowdown is &quot;much larger than assessed just a month ago&quot; due to substantial downward revisions in earlier figures.<\/p>\n<p>On inflation, Powell affirmed that while it has &quot;increased and stays somewhat high&quot; and &quot;remains somewhat elevated&quot; relative to the Fed&#39;s 2% target, most long-term inflation expectations remain &quot;well anchored&quot; near that goal. He projected that <strong>12-month PCE inflation was likely 2.7% and Core PCE 2.3% in August<\/strong>, both rising from the prior year due to goods prices. Critically, Powell reiterated that &quot;tariff-related inflation will likely be short-term&quot; and a &quot;one-time shift in the price level,&quot; with most goods price increases attributable to tariffs rather than broader price pressures. Disinflation in services, he added, continues.<\/p>\n<p>The Fed Chair stressed that &quot;two-sided risks mean there is no risk-free path&quot; for monetary policy, emphasizing that the policy is &quot;not on a preset course&quot; and remains &quot;modestly restrictive.&quot; The FOMC&#39;s latest projections imply additional <strong>50 basis points of rate cuts in 2025<\/strong>, followed by <strong>25 basis points in 2026<\/strong> and another <strong>25 basis points in 2027<\/strong>, though some Fed officials continue to diverge on the appropriate path for future easing.<\/p>\n<p>Powell also indirectly addressed criticisms regarding the central bank&#39;s independence, asserting that the Fed remains &quot;united in pursuing our mandate&quot; and takes a &quot;longer perspective&quot; to serve the American people. He also highlighted a drop in public trust in economic and political institutions, urging officials to focus on key jobs.<\/p>\n<h3>Geopolitical Developments<\/h3>\n<p>In other global news, Iran&#39;s Supreme Leader Ayatollah Ali Khamenei declared that &quot;We Do Not Need Nuclear Weapons, And Do Not Intend To Produce Them.&quot; This statement comes as Western powers consider reimposing United Nations sanctions amid concerns over Iran&#39;s nuclear program and recent calls from hardline Iranian lawmakers for a &quot;change in the defence doctrine&quot; to pursue nuclear weapons.<\/p>\n<p>Meanwhile, US House Democrats are scheduled to meet on Monday in Washington D.C. to discuss government funding. This meeting precedes a critical deadline for government appropriations.<\/p>\n<p>In the tech sector, <strong>Nvidia<\/strong> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) shares hit an all-time high yesterday on news of its partnership with OpenAI for data center buildouts, with Nvidia reportedly investing up to <strong>$100 billion<\/strong> in the ChatGPT developer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Federal Reserve Chair Jerome Powell indicated that the recent 25 basis point rate cut was a &quot;risk management&quot; 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