03:30 PM EDT, 09/17/2025 (MT Newswires) -- Federal Reserve Chair Jerome Powell said Wednesday that labor supply is growing "very little, if at all," while demand for workers has fallen sharply, signaling a more pronounced weakening in the labor market.

"There's very little growth, if any, in the supply of workers," Powell said at a press conference following the Federal Open Market Committee's decision to lower the federal funds rate by 25 basis points to a range of 4% to 4.25%. "At the same time, demand for workers has come down quite sharply to the point where we see what I've called a curious balance. Typically, when we say things are in balance, that sounds good. But in this case, the balance is because both demand and supply have come down sharply."

Powell said that recent data show faster goods price inflation, largely driven by higher tariffs. However, services prices remain unaffected, and overall inflation is expected to rise, though perhaps not as much as anticipated, he said.

"Right now, the situation we're in is that we see inflation," Powell said. "We continue to expect it to move up, maybe not as high as we would have expected it to move up a few months ago."

The rate cut was not unanimously supported. New Fed Governor Stephen Miran dissented, favoring a larger 50-basis-point reduction. According to the Summary of Economic Projections (SEP), one participant called for five additional rate cuts this year, while the rest were nearly evenly split between one or fewer cuts and two.

The updated SEP now projects two more rate reductions in 2025, compared with one in the previous forecast. One cut is expected in 2026 and another in 2027. Despite rising risks to employment, the SEP suggests slightly lower unemployment over the next two years, alongside higher inflation and GDP growth expectations.

Powell did not comment on President Donald Trump's attempts to dismiss Fed Governor Lisa Cook.