Federal Reserve Chair Jerome Powell said Thursday that interest rates are still expected to decline further, but suggested they might not be that much lower over the next few months.

Fed watchers see a greater chance the central bank may skip a rate cut at its last meeting of the year in December.

Strong U.S. economic and inflation data continue to reshape the debate among Federal Reserve policymakers over the pace and extent of interest rate cuts as investors on Friday further downgraded their expectations for a rate reduction at the central bank's December meeting.