Jerome Powell, Chairman of the Federal Reserve, on Friday evening reaffirmed the US central bank's commitment to a cautious approach to interest rates, but also expressed new optimism about the progress they have made so far, explaining that the Federal Reserve's actions in slowing the economy have become more balanced.

He said: The strong actions taken by policymakers pushed interest rates into the restrictive zone, which means that monetary policy is currently putting downward pressure on economic activity and inflation.

Noting that headline inflation, which averaged 2.5 percent over the past six months ending in October, is close to the Federal Reserve's 2 percent target, Jerome Powell acknowledged that monetary policy has largely succeeded in slowing the economy as expected, with rates... The interest may be largely in the restricted area.

Powell said in his speech during an event at Spelman College in Atlanta: We got what we wanted to get from the economy, but he noted that the full impact of the Federal Reserve raising interest rates significantly (5.25 percentage points) will likely appear later.

He continued: “Having come a long way so quickly, the Federal Open Market Committee will move forward with caution, as the risks of tightening and excessiveness have become more balanced.”

He explained: The data will tell us whether we need to raise interest rates further.

Jerome Powell, similar to his colleagues' recent statements, reiterated that it is too early to claim victory in the fight against inflation. He stressed that annual inflation remains high at 3.0 percent, based on the Federal Reserve's target of 2 percent.

“We are ready to tighten the policy further if it is appropriate to do so,” he said.

But Powell's comments also reflected growing confidence that current interest rates in the 5.25 percent to 5.50 percent range may be enough to get the job done.

The Federal Reserve meets on December 12 and 13, and is expected to leave interest rates unchanged for the third meeting in a row, which will reinforce the prevailing belief in the market that the US central bank has finished raising interest rates.

Peter Cardillo, chief economist at Spartan Capital Securities, interprets Jerome Powell's use of the word balanced in his remarks as a sign that the Fed will not change its message but is satisfied with how things are progressing and has no plans to further raise interest rates. Cardillo believes the Fed is done with its interest rate hike cycle, and the market shares this idea.