The Fed has not made a decision about the December meeting, Powell said. Reasoning his caution, he pointed towards the prevailing economic uncertainty, including upside risks to near-term inflation.

The high import tariffs imposed by the United States are pushing up the prices of some goods, Powell said, adding that the reasonable base case is of a “short-lived tariff inflation”.

Fed’s decision in December will be based on balancing its dual mandate, which is supporting the economic growth while keeping a check on inflation. Data for September, released last week, showed inflation growing softer-than-expected at 3%. However, it still remains higher than the Fed’s medium target of 2% inflation.

The data on unemployment, which has been restricted due to the federal government shutdown since Oct. 1, will be crucial in determining the Fed’s decision. If jobs growth remain sluggish, then the Fed is likely to continue with the rate cuts.

The unemployment data for September was not released this month, due to the shutdown that has furloughed around 750,000 workers.

However, the initial jobless claims jumped to 227,000 in the week ended Oct. 18, as compared to 220,000 in the preceding week, news agency Bloomberg reported, after analysing the unadjusted state-level filings.

The Fed, while deciding to cut rates for now, stressed on the “downside risks to employment” that have emerged in recent months. “Job gains have slowed this year, and the unemployment rate has edged up,” stated a release issued at the conclusion of the two-day Federal Open Market Committee meeting.