Overview

• Jerome Powell said the U.S. is approaching a point where rate cuts may be needed to support employment, citing the risk that labor conditions could deteriorate quickly.
• He warned that recently imposed tariffs are already feeding into consumer prices, calling the policy trade‑off delicate for inflation control and jobs.
• Investors reacted immediately, with the 2‑year Treasury yield dropping from 3.78% to 3.71%, the dollar falling about 0.54%, and major U.S. equity indexes moving higher.
• Market tools still show a majority expecting a September cut, though Fed minutes, mixed official remarks such as Beth Hammack’s caution, and pressure from the White House keep the outlook uncertain.
• The backdrop includes recent weakness in mega‑cap tech and chip stocks after reports on potential Chips Act equity stakes and on Nvidia’s H20 production for China, which added sector‑specific strain.