Powell hints at interest rate cuts as Trump continues Fed attacks

The Federal Reserve is gearing up to resume cuts to interest rates, its chair, Jerome Powell, has signaled, as he warned that Donald Trump's tariffs and immigration crackdown had upset the global economy and hit the US workforce.

- Lauren Aratani Callum Jones New York

For months, Powell has ignored the president's demands to cut interest rates and his calls to resign. But as Trump has ramped up attacks on the Fed's independence, Powell suggested yesterday that officials were considering a rate cut.

"With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," Powell said in a closely scrutinized speech at a symposium in Jackson Hole, Wyoming, highlighting a "challenging" dichotomy of risks: that Trump's tariffs might increase inflation, while his immigration policies knock the US labor market. Wall Street rose sharply after the address, with the benchmark S&P 500 gaining 1.6% as the Dow Jones industrial average climbed 1.9%. The tech-focused Nasdaq Composite advanced 2.1%.