US Federal Reserve Chairman Opens Door for Possible Rate Cut Without Clear Commitment

Sada News - Federal Reserve Chairman Jerome Powell opened the door on Friday for a possible interest rate cut during the bank's meeting in September; however, he did not make a clear commitment to that.

This statement was made in a speech at the bank's annual seminar in Jackson Hole, Wyoming, where he acknowledged the increasing risks threatening the labor market and that inflationary risks are still present.

Powell told an audience of economists and international policymakers, "At a time when the labor market seems to be in a peculiar balance, which is a strange balance resulting from a noticeable slowdown in the supply and demand for jobs, this unusual situation indicates an increase in negative risks to employment. If these risks materialize, they could occur quickly."

He added, "However, the increasing pressure on prices, resulting from tariffs, could exacerbate inflation, which is a risk that must be assessed and managed."

Powell went on to say that "The stability of the unemployment rate and other labor market metrics allows us to proceed with caution when considering adjustments to our policy."

Powell's remarks pave the way for a potential interest rate cut during the Federal Reserve meeting scheduled for September 16-17, but they also depend on the jobs and inflation reports that will be released before that date.

The next monthly jobs report is set to be released on September 5, and consumer and producer price data will be published the following week.

Powell's comments did not provide much guidance on when or how quickly to continue cutting interest rates, a move likely to provoke new pressure from Trump, who insists there is no inflation threat and that the Fed should cut rates immediately.

President Donald Trump is pressuring the central bank by calling for Powell's resignation. Trump also urged Federal Reserve Board member Lisa Cook to resign just days ago.

The Fed has maintained its key interest rate in the current range of 4.25% to 4.50% since December while officials have begun to grapple with the potential impact of the next administration's policies on inflation. Inflation remains above the Fed's 2% target and is expected to rise with the impact of new tariffs on consumer prices.