But if inflation continues to inch upward, the central bank may decide it needs to leave rates high to avoid a repeat of runaway inflation. Inflation peaked at 9.1% in June 2022 before slowly making its way back down closer to the Fed's target range of 2%.

A strong economy is giving Federal Reserve officials room to move “carefully” as they lower interest rates, the central bank chair said.

U.S. stock index futures fell on Friday after Federal Reserve Chair Jerome Powell said there was no need to rush interest-rate cuts, pushing up bond yields and pressuring rate-sensitive equities. In a speech on Thursday,