Overview

• The Fed chair stopped short of a commitment and said any policy change will be data‑dependent, with the policy rate still at 4.25%–4.50%.
• Rate‑futures pricing for a 25‑basis‑point cut in September jumped to roughly 89% after the speech as stocks rallied, Treasury yields fell, and the dollar weakened.
• Powell flagged an unusual slowdown in both labor supply and demand that raises downside risks to employment, warning job losses could emerge quickly if conditions deteriorate.
• He cautioned that tariffs are pushing some prices higher and could fuel a more persistent inflation dynamic even as the baseline view is that the effect will fade.
• Alongside the remarks, the Fed released a revised strategic framework tying maximum‑employment assessments to price stability, with the Sept. 5 jobs report and subsequent CPI/PPI set to guide the Sept. 16–17 decision under heightened political pressure from President Trump, including calls for Governor Lisa Cook to resign.