Fed Chair Powell Says Inflation, Hiring Slowdown Pose ‘Challenging Situation’

Article Synopsis

Fed Chair Jerome Powell warned that the central bank faces a “challenging situation” as slowing job growth collides with tariff-driven inflation, straining both sides of its mandate. Speaking at Jackson Hole, Powell signaled that shifting risks may justify an interest rate cut, a view markets quickly embraced, with odds of a September cut jumping to 91%.

Stocks rallied on the news. The remarks came amid political pressure from President Trump, who has repeatedly pushed for lower rates and clashed with Fed officials. Powell stressed the Fed’s independence and said policymakers must carefully balance the risks of higher inflation against the dangers of a weakening labor market.

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