Powell hints at interest rate cuts and warns of uncertainty risks in Jackson Hole. The Chairman of the U.S. Federal Reserve, Jerome Powell, during his speech at the "Jackson Hole" symposium on Friday, hinted at the possibility of lowering interest rates in the near future, but emphasized that the high level of uncertainty makes the task of monetary policymakers more complicated.
Powell confirmed that the labor market remains strong and the economy has shown resilience, but risks have increased recently, explaining that tariffs could push inflation back up, which the Fed aims to avoid.
He noted that the benchmark interest rate is about 1% lower than its level a year ago, and that the decline in unemployment gives the Fed room to move cautiously in adjusting monetary policy, adding that core expectations and shifts in risk balances may indeed warrant a review of the current position.
Powell said that the decisions of the Open Market Committee will remain "only linked to the evaluation of data," reiterating the central bank's commitment to achieving an inflation rate of 2% to maintain long-term expectation stability.
In assessing the economy, the Fed Chairman pointed out that job growth has slowed with a slowdown in consumer spending, noting that the supply and demand for labor are in an "unusual" state of balance. He also emphasized that monetary policy will be subject to periodic review every five years to adapt to structural changes in the economy.