Federal Reserve Chair Jerome Powell on Friday gave a tepid indication of possible interest rate cuts ahead as he noted a high level of uncertainty that is making the job difficult for monetary policymakers.In his much-anticipated speech at the Fed’s annual conclave in Jackson Hole, Wyoming, the central bank leader in prepared remarks cited “sweeping changes” in tax, trade and immigration policies. The result is that “the balance of risks appear to be shifting” between the Fed’s twin goals of full employment and stable prices.Watch Powell deliver his remarks liveWhile he noted that the labor market remains in good shape and the economy has shown “resilience,” he said downside dangers are rising. At the same time, he said tariffs are causing risks that inflation could rise again — a stagflation scenario that the Fed needs to avoid.With the Fed’s benchmark interest rate a full percentage point below where it was when Powell delivered his keynote a year ago, and the unemployment rate still low, conditions allow “us to proceed carefully as we consider changes to our policy stance,” Powell said.”Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” he added.That was as close as he came during the speech to endorsing a rate cut that Wall Street widely believes is coming when the Federal Open Market Committee next meets Sept. 16-17.However, the remarks were enough to send stocks soaring and Treasury yields tumbling. The Dow Jones Industrial Average showed a gain of more than 600 points following the public release of Powell’s speech while the policy-sensitive 2-year Treasury note saw a 0.08 percentage point fall to around 3.71%.In addition to market expectations, President Donald Trump has demanded …
