Jerome Powell hints at rate cuts during annual economic symposium

Federal Reserve Chairman Jerome Powell on Friday said economic conditions may warrant interest rate cuts soon, though the central bank is proceeding carefully. President Donald Trump for most of his current presidential term has slammed Powell for his refusal to quickly lower the central bank’s interest rates. Powell made the comments during his annual address at an economic symposium in Jackson Hole, Wyo.

The Federal Reserve has kept rates at 4.25-4.5% since December. Powell previously said in July that he planned to cut rates in the fall, but didn’t set a date for the changes. He was waiting to see if Trump’s tariffs affected inflation, he said at the time. Powell on Friday also credited the Federal Reserve’s aggressive rate hikes over the last few years for helping to curb inflation without a painful rise in unemployment.

Powell’s annual speech at the symposium on Friday was his last as Federal Reserve chairman, since his term is up in May 2026. It’s unclear whether he intends to stay on as a governor of the bank after his term expires.

What was Powell’s assessment on Friday of the U.S. financial outlook?

• High tariffs contributed to a rise in prices. The costs of goods and services, excluding food and energy, rose 2.9% above their level last year. But housing services inflation was dropping, he said. Powell was still highly uncertain about timing and amounts of consumer price increases coming from tariffs, he said.

• GDP growth slowed down in the first half of 2025 to 1.2%, roughly half of the 2.5% pace in 2024. A drop in consumer spending contributed to the decline, Powell said.

• Both supply of and demand for workers slowed down, partially due to changes in immigration policy. Risks to employment hadn’t materialized yet, Powell said, but could come quickly in the form of steep layoffs.

Dig deeper: Read Christina Grube’s report on the Federal Reserve’s July decision not to lower interest rates.