WASHINGTON (AP) — Chair 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 the Fed’s officials want to see where it heads next.

Powell, in prepared remarks for a speech in Dallas, said that inflation is edging closer to the Fed’s 2% target, “but it is not there yet.”

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

“The economy is not sending any signals that we need to be in a hurry to lower rates,” the Fed chair said. “The strength we are currently seeing 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, after a quarter-point reduction last week and half-point cut in September.

But the Fed’s steps after that are much less clear. In September, the central bank’s officials collectively signaled that they envisioned cutting their key rate four times in 2025. Wall Street traders, though, now expect just two Fed rate reductions, according to futures pricing tracked by CME FedWatch.

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The Fed’s benchmark interest rate tends to influence borrowing rates across the economy, including for mortgages, auto loans and credit cards. Other factors, though, can also push up longer-term rates, notably expectations for inflation and economic growth.

Donald Trump’s presidential election victory has sent yields on Treasury securities higher. It is a sign that investors expect faster growth next year as well as potentially larger budget deficits and even higher inflation should Trump impose widespread tariffs and mass deportations of migrants as he has promised.

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

Other Fed officials have also recently expressed uncertainty about how much more they can cut rates, given the economy’s steady growth and the apparent stickiness 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 not clear how much more the Fed should cut its key short-term rate.

“If we cut too far ... inflation could reaccelerate and the (Fed) could need to reverse direction,” Logan said. “I believe it’s best to proceed with caution.”