Federal Reserve Chair Jerome Powell shifted his tone Friday at Jackson Hole, warning that “downside risks to employment are rising” and that the Fed “may warrant adjusting” its policy stance if the economic slowdown continues.
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It was a surprisingly dovish message—one that caught Wall Street off guard. Many economists had expected Powell to maintain a cautious, inflation-focused tone and avoid signaling any rate cuts.
Instead, he leaned into labor market concerns and acknowledged weakening growth, paving the way for potential easing.
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