New York [US], August 23: U.S. Federal Reserve Chair Jerome Powell on Friday signaled the possibility of lowering a key interest rate soon, saying that the central bank will proceed cautiously as it continues to evaluate the impact of policies on the economy.
With borrowing costs weighing on growth, the labor market weakening and inflation pressure easing, "the shifting balance of risks may warrant adjusting our policy stance," Powell said at the central bank's annual symposium in Jackson Hole, Wyoming.
Powell stressed that the Fed faces a "challenging situation" as it seeks both low, stable inflation and a healthy labor market, which are in tension with each other.
"Powell's comments notably tempered expectations of an aggressive string of rate cuts by pointing to concerns around inflation, which has been above the Fed's 2 percent target for more than four years," reported The Wall Street Journal.
U.S. inflation has inched higher in recent months but remains well below the 9.1 percent peak reached three years ago.
Expectations for lower rates buoyed Wall Street. Stocks rallied, with both the Dow Jones Industrial Average and the Nasdaq Composite Index soaring some 2 percent and the S&P 500 up nearly 1.5 percent in midday trading.
Source: Xinhua News Agency