Powell Signals Possible September Rate Cut As Labor Market Softens And Tariff Pressures Push Inflation Higher

Federal Reserve Chair Jerome Powell signaled a potential September rate cut, citing a softening labor market and rising inflation risks from tariffs, according to The Wall Street Journal. Speaking at the Fed’s annual Wyoming symposium, Powell said the “balance of risks” is shifting asa weaker labor supply and demand create an unusual situation that could quickly trigger layoffs. He warned that tariffs are now clearly driving up consumer prices but suggested the effects may be short-lived if inflation expectations remain anchored. Investors welcomed his remarks, though he cautioned against expecting an aggressive cutting cycle. Trump has continued pressuring the Fed to lower rates further while threatening Powell’s job.