Jerome Powell: Risks to the economy "are changing" and points to a rate cut

WASHINGTON, DC.- This Friday, the president of the United States Federal Reserve , Jerome Powell , stated that “the balance of risks ” for the economy of his country “ is changing ”, which together with his concern about the labor market , could lead the organization to implement an interest rate cut soon.

“The outlook and the changing balance of risks (in the economy) may warrant an adjustment to our stance and our (monetary) policy,” Powell said during his speech at the central bankers symposium he is chairing in Jackson Hole , Wyoming .

“Risks to inflation are skewed to the upside and risks to employment are skewed to the downside, a complex situation when our objectives are so in conflict,” Powell explained, referring to the Fed’s dual mandate, adding that although the price of money is now “closer to neutral than a year ago,” the current “baseline outlook and the shifting balance of risks could warrant adjusting our policy stance.”

Powell said the labor market is showing a “curious” stability “resulting from a decline in the supply and demand for workers,” but downside risks are rising.

He also stated, for the first time with such clarity, that the impact of the tariff increase on prices could be "relatively short-lived," although "the effects of tariffs on consumer prices are already clearly visible."

These statements, made at the start of his eagerly awaited speech at the economic forum that the Fed holds every summer in the state of Wyoming, Prices on Wall Street soared , with the Dow Jones Industrial Average , the Nasdaq and the S&P 500 registering gains of around 1.5% in the first hour of trading.

Speech by Chair Powell on the economic outlook and framework review at an economic policy symposium sponsored by @KansasCityFed : https://t.co/rmcHrQFSvf

Watch live: https://t.co/xOEbfu9h6K

Learn more about Chair Powell: https://t.co/3kYVCuudso pic.twitter.com/1S4QrbydO4