Why it matters: For now it looks likely that the U.S. economy could avoid a recession as inflation plunges and the labor market remains healthy. Powell signaled that lower rates could help guarantee a so-called "soft landing," but cautioned that some risks remain.

Federal Reserve Chair Jerome Powell on Monday said the U.S. economy is in "solid shape" and that more interest rate cuts can continue if the economy continues to evolve as expected.

Powell said two more rate cuts are possible if the economy continues to perform as expected, though they are likely to not be as aggressive as the cut two weeks ago.