JACKSON HOLE, Wyoming — Federal Reserve Chair Jerome H. Powell indicated on Friday that a weakening labor market could justify reductions in interest rates in the coming months. While making this assessment, he also highlighted ongoing risks to inflation stemming from trade policies associated with former President Donald Trump. The remarks, delivered at the annual central banking symposium in Jackson Hole, sparked a rally in equity markets as investors interpreted the comments as a signal of potential monetary easing. Powell emphasized that the Fed would remain data-driven, with employment trends playing a central role in future decisions. Although inflation remains a concern, signs of softening job growth may outweigh inflationary pressures in shaping the central bank’s next moves. Market participants viewed the speech as cautiously optimistic, with futures pricing in a higher likelihood of rate cuts during upcoming Federal Open Market Committee meetings.
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Powell says weaker labor market may merit rate cuts, fueling stock rally
JACKSON HOLE, Wyoming — Federal Reserve Chair Jerome H. Powell said on Friday that a slowing job market “may warrant” interest rate cuts in the future, but he also warned that President Donald Trump’s trade policies still threaten to push inflation higher.