The Federal Reserve cut interest rates by a quarter of a percentage point on Thursday, setting the latest path for borrowing costs, just two days after President-elect Donald Trump’s victory.

The move comes two months after the Fed cut its key interest rate by half a percentage point, reversing years of fighting inflation and providing relief to borrowers saddled with high costs.

Fed Chairman Jerome Powell expressed optimism at a news conference in Washington DC on Thursday about the prospects for achieving a “soft landing,” in which the US averts a recession while inflation returns to normal.

“We remain confident that with an appropriate policy recalibration, the strength of the economy and labor market can be maintained while inflation can sustainably decline to 2%,” Powell said.

The inflation trajectory could change in the coming months. Trump’s proposals for higher tariffs and the mass deportation of undocumented immigrants are widely expected to raise consumer prices, experts previously told ABC News.

When asked about the Fed’s possible response to Trump’s policies, Powell said the central bank would ultimately make its decisions based on how policy changes could affect the economy.

“In the short term, the election will have no impact on our policy decisions,” Powell said Thursday. “We do not know what the timing and content of any policy changes will be. We therefore do not know what the effects on the economy will be.”

“We don’t guess, we don’t speculate and we don’t assume,” Powell added.

The Federal Open Market Committee (FOMC), a policymaking body of the Fed, has predicted further interest rate cuts.

According to FOMC projections, rates will fall another quarter of a percentage point from their current levels by the end of 2024, between 4.5% and 4.75%. Interest rates will fall another percentage point over the course of 2025, the projections further indicated.

In recent months, the US has moved closer to a “soft landing” in which inflation returns to normal and the economy averts a recession.

Government data released last week showed robust economic growth over the past three months, alongside a continued cooling of inflation.

U.S. hiring slowed in October, but the impact of hurricanes and strikes likely caused an undercount of the number of workers in the country, data from the U.S. Bureau of Labor Statistics showed Friday.

Since 2021, the Fed has been trying to rein in inflation with higher interest rates. Even after the Federal Reserve cut its interest rates in September, they are still at historically high levels.

Inflation has cooled dramatically from a peak of around 9% in 2022 and is hovering close to the Federal Reserve’s target rate of 2%.

When Powell was previously asked about the 2024 election at a news conference in Washington DC in December, he said: “We’re not thinking about politics.”

Trump’s election appears to have given a boost to the stock market. The US stock market rose at the opening of trading on Wednesday, just hours after Trump declared victory.

The Dow Jones Industrial Average rose more than 1,300 points, which represents an increase of almost 3% of the index. The SThe &P 500 and the tech-heavy Nasdaq each rose more than 2%.

Shares of Tesla, the electric vehicle company led by Trump ally Elon Musk, rose about 14.5% in early trading on Wednesday.