Powell Hints Fed May Soon Cut Rates

In a high-profile speech at the Jackson Hole Banking Symposium in Wyoming — closely watched by the White House and Wall Street — Federal Reserve Chair Jerome Powell warned of risks from both rising unemployment and stubborn inflation.

Powell's comments suggest the Fed will continue evaluating jobs and inflation data before making a decision on rate cuts, including at its next meeting on September 16–17. 

That puts the Fed in a difficult position: it would normally cut short-term rates to boost hiring, while keeping them high, or even raising them, to fight inflation, Doloresz Katanich reported for Euronews.

“The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said in prepared remarks.

His comments suggest the Fed will continue evaluating jobs and inflation data before making a decision on rate cuts, including at its next meeting on September 16–17.

“Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell added — a more direct sign than in previous remarks that a rate cut is on the table.

Still, Powell emphasized caution, noting that decisions will hinge on how inflation and unemployment evolve in the months ahead.

The Fed’s measured approach may frustrate financial markets, which have been hoping for clearer signals, and President Donald Trump, who has repeatedly chastised Powell for not cutting rates sooner.

Wall Street rallied after Powell’s speech despite no firm timeline being given for when rate cuts might occur, the Associated Press also reported.