Fed Powell: time is ripe for Fed to cut rates, doesn't want labor market to cool further

Federal Reserve Chairman Jerome Powell said that the time has come for the Fed to cut interest rates, a statement that confirms market expectations that the central bank will start cutting rates next month. Powell also emphasized that he would prevent the labor market from cooling further. “The time has come to adjust policy,” Powell said Friday at the annual meeting in Jackson Hole. “The way forward is clear, and the timing and pace of rate cuts will depend on upcoming data releases, the evolving outlook and the balance of risks.”
While the comments lifted some of the fog from financial markets in the short term, they offered few clues about how the Fed might act after its September meeting. But Powell's remarks at least confirmed that the Fed's two-year battle with inflation is nearing a key turning point. The labor market has been surprisingly strong for much of those two years, giving officials enough room to lower inflation and push it toward the central bank's 2 percent target.