{"id":70472,"date":"2025-08-22T14:43:48","date_gmt":"2025-08-22T18:43:48","guid":{"rendered":"https:\/\/queonnda.com\/powell-opens-the-door-to-interest-rate-cut\/"},"modified":"2025-08-22T14:44:29","modified_gmt":"2025-08-22T18:44:29","slug":"powell-opens-the-door-to-interest-rate-cut","status":"publish","type":"post","link":"https:\/\/queonnda.com\/en\/powell-opens-the-door-to-interest-rate-cut\/","title":{"rendered":"Powell opens the door to interest rate cut"},"content":{"rendered":"<p>The president of the United States Federal Reserve (Fed), Jerome Powell, warned on Friday, August 22, that the &#8220;balance of risks&#8221; for the US economy is changing and that the institution could soon be forced to cut interest rates. The message, delivered during his keynote speech at the annual central bankers&#8217; symposium in Jackson Hole (Wyoming), was interpreted by the markets as a sign of a shift in the country&#8217;s monetary policy. <\/p>\n<p>Powell explained that the agency he heads has a dual mandate: to keep inflation under control and ensure maximum employment. However, both goals are in tension. &#8220;Risks to inflation are skewed to the upside and risks to employment are skewed to the downside, a complex situation when our objectives are so in conflict,&#8221; he said. Although current interest rates are &#8220;closer to neutral than they were a year ago,&#8221; Powell made it clear that the new economic backdrop may warrant &#8220;an adjustment in our policy stance.&#8221;   <\/p>\n<p><!--more--><\/p>\n<h2>Labor market under pressure<\/h2>\n<p>One of the Fed&#8217;s biggest concerns is employment trends.<\/p>\n<p>According to Powell, the labor market has shown a &#8220;curious stability&#8221; derived from the fall in both the supply and demand for workers.<\/p>\n<p>However, he stressed that downside risks are increasing, raising fears of a possible labor market slowdown in the coming months.<\/p>\n<h2>Tariffs and migration, impact factors<\/h2>\n<p>The Fed Chairman also directly addressed the effect of the economic policies of the current U.S. administration led by Donald Trump.<\/p>\n<p>He noted that the substantial increase in <a href=\"https:\/\/queonnda.com\/en\/us-imposes-tariffs-steel-aluminum-products\/\" target=\"_blank\" rel=\"noopener\">tariffs<\/a> with trading partners is changing the global trading system.<\/p>\n<p>Although Powell acknowledged that the impact on consumer prices could be &#8220;relatively short-lived,&#8221; he also admitted that &#8220;the effects of tariffs on prices are already clearly visible.&#8221;<\/p>\n<p>Another factor he highlighted was the restrictive immigration policy of the current administration.<\/p>\n<p>According to Powell, the measures that have limited the inflow of immigrants are causing an &#8220;abrupt slowdown in long-term labor force growth.&#8221;<\/p>\n<p>This is especially relevant in a country where the immigrant population plays an essential role in sectors such as construction, health care, agriculture and services.<\/p>\n<p>For millions of Hispanics living in the United States, these policies affect not only job opportunities, but also the economic stability of their communities.<\/p>\n<h2>Tax and financial implications<\/h2>\n<p>Powell also referenced the recent tax and budget reform bill pushed by Trump and passed by Congress in July.<\/p>\n<p>According to the Fed chairman, changes in tax, spending and regulatory policies could have significant implications for the country&#8217;s economic growth and productivity.<\/p>\n<p>Analysts have warned that tax cuts, combined with high government spending, could exacerbate the U.S. budget deficit, generating greater uncertainty among investors.<\/p>\n<h2>Market reaction to Powell&#8217;s announcement and interest rate announcement<\/h2>\n\n<p>Powell&#8217;s speech on interest rates had an immediate impact on financial markets.<\/p>\n<p>In the first hour of trading following his remarks, the main Wall Street indexes registered rallies of close to 1.5%.<\/p>\n<p>The Dow Jones Industrials, the Nasdaq and the S&amp;P 500 responded to the optimism of investors who see a possible rate cut as a relief for investment and consumption.<\/p>\n<p>The Fed chairman&#8217;s remarks also come amid rising political tensions.<\/p>\n<p>President Donald Trump has on multiple occasions criticized Powell and suggested he should step down from his post.<\/p>\n<p>However, the Fed maintains its institutional independence and Powell reiterated that the agency&#8217;s decisions will continue to be based on economic data and not on political pressures.<\/p>\n<p>Ultimately, Powell&#8217;s warning on interest rates marks a key moment for the U.S. economy.<\/p>\n<p>The future of interest rates will depend on the evolution of the labor market, the impact of tariffs, immigration policies and the government&#8217;s fiscal measures.<\/p>\n<p>For working families, including Hispanic communities, these decisions will have direct consequences on the cost of credit, mortgages, investments and access to stable employment in the coming months.<\/p>\n<figure class=\"wp-block-pullquote\"><blockquote><p style=\"color: #fd9737;\">Los riesgos para la inflaci\u00f3n est\u00e1n sesgados al alza y los riesgos para el empleo, a la baja, una situaci\u00f3n compleja cuando nuestros objetivos est\u00e1n tan en conflicto<\/p><cite>Jerome Powell, jefe de la Fed<\/cite><\/blockquote><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>The president of the United States Federal Reserve (Fed), Jerome Powell, warned on Friday, August 22, that the &#8220;balance of risks&#8221; for the US economy is changing and that the institution could soon be forced to cut interest rates. The message, delivered during his keynote speech at the annual central bankers&#8217; symposium in Jackson Hole [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":70468,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[149,54],"tags":[489],"class_list":{"0":"post-70472","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"category-economy","9":"tag-economy"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.0 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Powell interest rates: Federal Reserve opens the door to a turnaround<\/title>\n<meta name=\"description\" content=\"Jerome Powell warns that U.S. economic risks are shifting and that the Federal Reserve could lower interest rates soon\" \/>\n<meta name=\"robots\" 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