Federal Reserve Chairman Jerome Powell opened the door last Friday to a possible interest rate cut during the bank's meeting in September, but he did not commit to it explicitly.
This came in a speech he gave at the bank's annual symposium in Jackson Hole, Wyoming, where he acknowledged the increasing risks threatening the labor market and that the risks of rising inflation also remain.
Powell said in front of a crowd of economists and international policymakers, "At a time when the labor market appears to be in a strange balance due to a noticeable slowdown in the supply and demand for jobs, this unusual situation indicates increasing negative risks to employment. If these risks materialize, they could happen quickly."
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Powell's statements pave the way for a possible interest rate cut during the Fed's meeting scheduled for September 16 and 17, but they also rely on job and inflation reports that will be released before that date.
The Fed keeps the benchmark interest rate in the current range of 4.25% to 4.50% since December, while officials have begun to address the potential impact of the upcoming administration's policies on inflation. Inflation remains above the central bank's target of 2%, and is expected to rise with the impact of new tariffs on consumer prices.
