Fed Chair Powell delivering key speech today: Here's what to expect

All eyes will be on Federal Reserve Chair Jerome Powell when he delivers a speech Thursday before the Economic Club of New York as investors look for clues about where monetary policy is headed next.

Powell is scheduled to deliver prepared remarks and respond to questions from a moderator at 12 p.m. in New York, just two weeks before central bank officials next meet on Oct. 31-Nov. 1. Policymakers typically enter a "blackout period," when they are barred from making public comments on the economy and policy starting the second Saturday before the meeting begins. 

Experts anticipate that Powell will stay the course on the future path of interest rates – lauding recent declines in inflation but stressing that officials are prepared to raise interest rates further if warranted.

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"I do not expect Chair Powell to front run the committee ahead of the November policy meeting," Joe Brusuelas, RSM chief economist, told FOX Business. "His text and tone are likely to mirror both the September policy statement and press conference."

Officials voted at the meeting last month to hold interest rates steady at a range of 5.25% to 5.5%, the highest level since 2001. However, policymakers also left the door open to an additional increase this year – and indicated they will hold rates at peak levels for longer than previously expected.

"We're prepared to raise rates further, if appropriate, and we intend to hold policy at a restrictive level until we're confident that inflation is moving down sustainably toward our objective," Powell told reporters at a post-meeting press conference in Washington.

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While inflation has declined from a high of 9.1%, it remains above the Fed's 2% target. The Labor Department reported last week that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.4% in September from the previous month. 

Prices are up 3.7% from the same time one year ago.

The Fed is scheduled to meet two more times this year, in November and December. While most investors agree the central bank will hold rates steady at the upcoming November meeting, there is a growing expectation among traders that the Fed will approve another rate hike in December, according to the CME Group's FedWatch tool, which tracks trading. 

"The strong resiliency in both consumer spending and the labor market could prompt the Fed to raise rates another time in the coming months – we look towards Chairman Powell’s speech on Thursday for guidance," said Kathy Bostjancic, Nationwide chief economist. "However, more importantly it underscores that rates will remain higher for longer especially with inflation on the services side remaining sticky."

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Hiking interest rates tends to create higher rates on consumer and business loans, which then slows the economy by forcing employers to cut back on spending. Higher rates have helped push the average rate on 30-year mortgages above 7% for the first time in years. Borrowing costs for everything from home equity lines of credit to auto loans and credit cards have also spiked.

Fed officials have increasingly noted the risk of overdoing it, even as the economy remains resilient in the face of higher interest rates.