Jackson Hole, Wyoming,August 23(HS): Federal Reserve Chair Jerome Powell has ignited expectations of a September interest rate cut, boosting US stock markets and easing concerns over the economic impact of President Donald Trump’s sweeping tariffs.

Speaking at the annual Jackson Hole gathering of central bankers, Powell said that while tariffs have visibly pushed consumer prices higher, their inflationary effect is likely to be short-lived. He acknowledged a challenging outlook—with inflation risks tilted upward and employment risks tilted downward—suggesting the Fed may adjust policy to support growth.

With rates currently at 4.25–4.5%, Powell noted they are already in “restrictive territory,” dampening economic activity. His dovish tone sent the S&P 500 up 1.5% by the end of Friday’s trading.

However, Powell cautioned against assuming a September cut was guaranteed, stressing that monetary decisions would be based solely on economic data, not political pressure. His remarks come amid Trump’s ongoing criticism, including personal insults and threats to remove him from office, after Powell resisted calls for steep and immediate rate cuts.

Powell’s Jackson Hole speech, likely his last as Fed chair before his term ends in May 2026, left investors more confident of an imminent reduction in borrowing costs but also mindful of the Fed’s underlying caution.

—————

Hindusthan Samachar / Jun Sarkar