Foreign media reported that Jerome Powell, chair of the U.S. Central Bank Federal Reserve (Fed), suggested the possibility of additional interest rate cuts.
According to the AP and others on the 14th (local time), Powell said in a public address at a conference held in Philadelphia that "through August, the unemployment rate remains low and job growth has slowed sharply. This appears to be partly due to reduced labor force growth from a decline in immigration and a decrease in labor market participation."
He went on, "In this less dynamic and somewhat weaker labor market, the downside risks to employment appear to have increased," adding, "Although the release of the September employment report (from the Labor Department) has been delayed, the available evidence suggests that layoffs and hiring remain at low levels, and households' perceptions of job prospects and corporations' perceptions that hiring will be difficult point to a continued downward trend seen so far."
Foreign media assessed this as signaling room for additional rate cuts this year to support a recovery in the labor market. The AP said, "Powell said the sharp slowdown in hiring poses an increasing risk to the U.S. economy," adding, "This is a sign that the Fed is likely to cut the benchmark rate two more times this year."
The Wall Street Journal (WSJ) also interpreted that, despite ongoing concerns about sticky inflation, by emphasizing the weakening labor market, he left the door open to cutting rates at the Federal Open Market Committee (FOMC) meeting on the 28th–29th.
Powell also voiced concern about employment conditions during the Q&A. Powell said, "We are now at a point where a further decline in job openings is very likely to lead to a rise in unemployment," adding, "Up to now, it has been a remarkable period in which the unemployment rate did not rise even as job openings fell rapidly, but we are now likely to reach the point where unemployment begins to rise."
Meanwhile, on inflation, Powell explained, "With core goods prices outpacing the decline in dwellings services prices, the 12-month core personal consumption expenditures (PCE) price index inflation rate through August was 2.9%, slightly higher than at the beginning of the year."
He added, "The available data and surveys continue to show that the rise in goods prices primarily reflects tariffs rather than broader inflationary pressures," and "Consistent with these effects, short-term inflation expectations have generally risen this year, while the most long-term inflation expectations have remained consistent with our 2% goal."