Federal Reserve Chair Jerome Powell, speaking at the annual Jackson Hole Economic Symposium, indicated that the central bank may consider easing interest rates in the near term, prompting a positive response from financial markets.
Powell highlighted that downside risks to U.S. employment are increasing, noting that the effects of tariffs on consumer prices are now clearly visible. He cautioned that upward price pressures from tariffs could potentially create a more persistent inflationary dynamic if not addressed.
Despite these challenges, the Fed chair emphasized that the overall labor market remains stable. “Unemployment rate stability, along with other labor market measures, allows us to proceed carefully on any policy adjustments,” he stated.
He reaffirmed the Fed’s commitment to maintaining a policy framework suitable across a broad range of economic conditions. While inflation remains above target, Powell described the current policy rate as “restrictive—modestly so, in my view.”
The Federal Reserve remains prepared to deploy its full range of tools to achieve its dual mandate of maximum employment and price stability, signaling a measured approach to future policy adjustments.
