Fed Chair Powell Notes ‘Shifting Balance of Risks.’ Could Rate Cuts Be Coming?

Federal Reserve Chair Jerome Powell noted a “shifting balance of risks” in the US economy during a speech in Jackson Hole on Friday, leading many media outlets across the spectrum to suggest interest rate cuts could be coming soon.

Key Quotes: Powell said he suspects inflation will continue to rise and that “downside risks to employment are rising.” He added, “The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Powell also commented on President Trump’s tariffs: “...the effects of tariffs on consumer prices are now clearly visible. A reasonable base case is that the effects will be relatively short-lived – a one-time shift in the price level.”

Key Details: On Friday, after Powell’s speech, the Dow rose 1.89% to a record high of 45,632. The Fed will announce a decision on whether to cut rates or not on September 17.

For Context: Trump and Powell have clashed publicly over whether the Fed should cut rates, most notably in late July when Trump made a special visit to the Reserve. In June, Trump wrote on Truth Social that Powell was “one of the dumbest, most destructive people in government,” adding that rates should be “2.5 Points lower.”

Dates to Watch: The Wall Street Journal (Center bias) wrote there are “several important data points to come, which could influence the Fed's decision making.” The Journal noted “key dates to watch” that included the August jobs report on September 5, the producer-price index on September 10, and the consumer-price index on September 11.

Across The Spectrum: Semafor (Lean Left) wrote in its headline that Powell’s speech was an “unmistakable signal” that rate cuts are coming. Fox Business (Lean Right) took a softer stance, saying the shifting conditions “could allow for an interest rate cut.”

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