WASHINGTON (AP) — Chairman Jerome Powell said Thursday that the Federal Reserve will likely cut its key interest rate slowly and deliberately in the coming months, in part because inflation has shown signs of persistence and Fed officials want to see where it goes next.

Powell, speaking in Dallas, said inflation was moving closer to the central bank’s 2 percent target, “but it’s not there yet.”

At the same time, he said, the economy is strong and policymakers can take time to monitor the path of inflation.

“The economy is not sending any signal that we need to rush to cut rates,” the Fed chairman said. “The strength we currently see in the economy gives us the ability to approach our decisions carefully.”

Economists expect the Fed to announce another quarter-point rate cut in December, following a quarter-point cut last week and a half-point cut in September.

But the Fed’s steps after that are much less clear. In September, central bank officials collectively signaled that they intended to cut their key rate four times in 2025. However, Wall Street traders now expect just two rate cuts, according to futures prices tracked by CME FedWatch. And after Powell’s cautious remarks on Thursday, traders put the likelihood of a Fed rate cut in December at just under 59%, down from 83% a day earlier.

The Fed’s benchmark interest rate tends to influence lending rates throughout the economy, including for mortgages, auto loans and credit cards. Other factors, however, can also push long-term rates higher, particularly expectations of inflation and economic growth.

For example, Donald Trump’s victory in the presidential election sent Treasury yields higher. It’s a sign that investors expect faster growth next year, as well as potentially higher budget deficits and even higher inflation, should Trump impose widespread tariffs and mass deportations of migrants, so as he promised.

In his remarks on Thursday, Powell suggested that inflation could remain stuck somewhat above the Fed’s target in the coming months. But he reiterated that inflation should eventually fall further, “albeit on a sometimes bumpy path.”

When questioned, Powell also explained why he believes the Fed’s role as an independent federal agency is crucial to its ability to fight inflation. During his first term, Trump threatened to try to fire Powell for failing to cut interest rates. And on the campaign trail this year, Trump said that as president he should have “a say” in the Fed’s rate policies.

Powell said Thursday that the Fed’s independence from political concerns has made the public confident that policymakers will keep inflation low over time. That confidence, in turn, helped reduce inflation after it spiked in the wake of the pandemic. When consumers and businesses expect inflation to slow, they act in ways that help contain it—for example, by not demanding large increases in the cost of living.

“The public,” Powell said, “believed we were going to bring down inflation, that we were going to restore price stability. And that, in the end, is the key to it.”

Powell declined to comment on other policy topics, including the potential impact of Trump’s proposals to impose high tariffs and implement mass deportations.

Other Fed officials have also recently expressed uncertainty about how much they can cut rates, given the steady growth of the economy and the apparent stiffness of inflation.

As measured by the central bank’s preferred inflation gauge, so-called core prices, which exclude volatile food and energy costs, have been stuck in the high 2% range for five months.

On Wednesday, Lorie Logan, president of the Fed’s Dallas branch, said it was unclear how much the Fed should cut the key rate in the short term.

“If we cut too much … inflation could reaccelerate and (the Fed) may have to reverse course,” Logan said. “I think it’s best to proceed with caution.”