US Federal Reserve Chair Jerome Powell has indicated that the US central bank may soon cut interest rates, citing the growing impact of President Donald Trump’s tariffs and immigration crackdown on the economy and labor market.
Speaking at the Jackson Hole symposium in Wyoming on Friday, Powell said: “With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” He warned of a difficult policy trade-off: tariffs could fuel inflation, while tighter immigration measures are slowing labor force growth.
Powell’s remarks come amid intensifying attacks on the Fed’s independence. Trump has repeatedly demanded rapid rate cuts and even called for Fed governor Lisa Cook to resign, threatening to fire her after allies accused her of mortgage fraud, a claim she denies.
Powell, who has usually been cautious about criticizing government policies, has grown more vocal lately as his standoff with President Donald Trump continues.
He noted tariffs are reshaping global trade and raising consumer prices, while immigration restrictions have sharply slowed labor supply. Although the Fed has held rates steady for five meetings, Powell has signaled that worsening risks to jobs and growth may now tip the balance toward cuts before the end of 2025.
