Powell signals Fed may cut rates soon even as inflation risks remain
By CHRISTOPHER RUGABER, Associated Press Economics Writer
JACKSON HOLE, Wyo. (AP) — Federal Reserve Chair Jerome Powell hinted at the possibility of lowering a key interest rate in the near future during a speech at the Fed’s annual economic symposium in Jackson Hole, Wyoming. Powell expressed concerns about the impact of tariffs and other policies on the economy, suggesting that the central bank will proceed cautiously as it evaluates the situation.
While Powell acknowledged risks of rising unemployment and higher inflation, he emphasized the need to monitor the job market, which has shown signs of weakness. This has led to discussions about potentially adjusting the policy stance with a rate cut.
Despite the indication of a rate cut, Powell’s remarks suggest that the Fed will approach the decision carefully over the coming months, taking into account factors such as inflation and unemployment data. The stock market responded positively to Powell’s comments, with the S&P 500 index rising 1.5% in midday trading.
President Donald Trump’s ongoing pressure on Powell to lower rates has added a layer of public scrutiny to the Fed’s decision-making process. Trump’s comments have raised concerns about the independence of the Fed, especially in light of his recent remarks regarding Federal Reserve Governor Lisa Cook.
During his speech, Powell also addressed the impact of tariffs on inflation, noting that the effects are becoming more visible and could lead to higher consumer prices in the future. He emphasized the Fed’s commitment to ensuring that any inflationary pressures are managed effectively.
In conclusion, Powell reiterated the Fed’s dedication to making decisions based on data and economic outlook, free from political influence. He also announced changes to the Fed’s policy framework to adapt to the evolving economic conditions.
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