Federal Reserve Chair Jerome Powell on Friday highlighted twin economic risks of a slowing labor market and rising inflation, but opened the door to rate cuts in a widely anticipated speech at the annual Jackson Hole, Wyoming economic forum.

"Risks to inflation are tilted to the upside, and risks to employment are to the downside — a challenging situation," Powell said in his speech.

The Fed will "proceed carefully" but the shifting balance of risks "may warrant adjusting our policy stance," Powell said.

Powell's remarks signal the Federal Reserve is likely to cut rates at its Sept. 17 meeting, which would mark the first reduction since December 2024, several economists said in research notes following the speech. Wall Street cheered Powell's remarks, with the S&P 500 jumping 1.3% in la

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