After spending much of the year battling the forces of uncertainty weighing on the economy, the Fed declared victory today. Absent a fresh deterioration in the economic outlook, Fed Chair Jerome Powell and his colleagues believe they are done cutting rates with this month’s policy move. Expect an extended policy pause; the Fed is neither interested in easing policy further given their outlook nor in soon raising rates back up given continued below-target inflation.

Going into the meeting, I thought the Fed would set more conditionalityaround the next policy move. The Fed did not disappoint. The statement set the tone with the Fed dropping the phrase “will act as appropriate to sustain the expansion.” That phrase had become the coded message signaling that future rate cuts were more likely than not. Its removal alone was a clear shift in messaging that another rate cut was not currently under consideration.

In the post-meeting press conference, Powell removed any doubt that the Fed saw this cut as the end of their mid-cycle adjustment, stating “We see the current stance of policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook.”

This is a fairly straightforward message establishing conditionality around any further rate cuts. A status quo economic outlook, which was sufficient to justify this rate cut, would not be sufficient to justify another. Powell wanted to make a clear signal about the kind of data that would force the Fed into another cut. That data would have to be sufficient to materially negatively impact the Fed’s economic outlook. To make a complex analysis concise, another rate cut requires a constellation of data indicating substantial, sustained upward pressure on unemployment.

The Fed isn’t seeing such data as likely, and hence don’t expect to cut again. Still, this isn’t as hawkish as it might seem. Although the Fed doesn’t intend to cut rates further, they also don’t expect to raise rates in the foreseeable future. It will take more than just an easing of the risks to the outlook for the Fed to reverse this series of cuts. According to Powell, the Fed won’t hike rates until they see a persistent and significant upward inflation move. That also isn’t in their outlook.

Policy is appropriate with neither easing nor tighter policy needed given the current outlook. That’s the recipe for an extended pause.

Of course, this forecast, like all the Fed’s forecasts, for rates is data dependent. Powell did not take the possibility of a rate cut off the table entirely. But it is easy to tell a story where the data takes a cut off the table for him. For instance, mixed regional purchasing manager indexes suggest that the manufacturing cycle may be bottoming out; if so we could soon see better news from the nation’s factories fairly soon. If that happens while the jobs market stays solid (as expected to be the case in the upcoming employment report for October, after accounting for any temporary strike-induced weakness), the Fed will see no reason to cut further.

Bottom Line: All else equal, as long as the data remains consistent with growth around 2%, the Fed isn’t cutting rates. And as long as the data remains consistent with inflation at (and certainty below) 2%, the Fed isn’t inclined to hike rates either. Such a “policy pause” forecast feels like a good baseline going into the end of the year. After a fairly hectic year, Powell and his colleagues are moving off to the sidelines.