‘Direction Of Travel Is Clear’: Powell Announces Intent To Shift Fed Policy As Concerns Over Jobs Market Surges
Federal Reserve Chairman Jerome Powell showed concern regarding recent cooling in the labor market during a speech at the Federal Reserve Bank of Kansas City’s Jackson Hole Symposium on Friday. Powell signaled that the…
Federal Reserve Chairman Jerome Powell showed concern regarding recent cooling in the labor market during a speech at the Federal Reserve Bank of Kansas City’s Jackson Hole Symposium on Friday.
Powell signaled that the Fed’s focus regarding its interest rate policy had shifted away from inflation to instead the weakening labor market following a disappointing jobs report for July and a Wednesday adjustment that revealed the Biden administration had overestimated previous jobs reports by nearly a million between April 2023 and March 2024. He also suggested a rate cut at the Federal Open Market Committee’s (FOMC) next meeting in September is likely, stating that it’s time for the Fed to change course.
“The upside risks to inflation have diminished, and the downside risks of employment have increased,” Powell said. “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.”