Powell’s closer attention to cooling job market boosts hopes for Fed rate cuts

Powell emphasized that the job market has cooled down, with the unemployment rate rising and inflation still too high, which puts the Fed in a precarious position. He acknowledged that the central bank is now paying just as much attention to the slowing labor market as it is to inflation, signaling a potential shift towards cutting interest rates.

The Federal Reserve has held interest rates at their highest levels in 23 years for nearly a year in an effort to push inflation down. As inflation starts to cool, there are indications that the central bank is considering cutting interest rates, possibly as early as September. However, Fed Chair Jay Powell emphasized that more data on cooling inflation is needed before making any decisions.