Key takeaways from Fed Chair Powell’s Jackson Hole speech

Jerome Powell

Here are the key takeaways from Federal Reserve Chair Jerome Powell’s prepared remarks at the Kansas City Fed’s economic symposium on Friday:

•Powell left the door open to an interest-rate cut at the Fed’s Sept. 16-17 meeting, saying, “the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance”

•The Fed chair also said “the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance”

•On the labor market, Powell said while it “appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising”

•A “reasonable base case” is that tariffs create a “one time” shift up in the price level, but those effects will take time to fully work their way into the economy, Powell said

• “In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation,” Powell said

•Powell said the Fed has adopted a new framework that removes a reference to the central bank seeking inflation that averages 2% over time and one to it making decisions on employment based on shortfalls from its maximum level