Fed Chair Jerome Powell hints at possible rate cut in September | LiveNOW from FOX

We heard Federal Reserve Chair Jerome Powell speak on Friday, saying that the "balance of risks appears to be shifting" in the U.S. economy. This comes as policymakers at the central bank weigh labor market conditions and inflation data ahead of their next interest rate decision. LiveNOW’s Andy Mac is getting the latest updates from Christopher Rugaber, who has covered the Federal Reserve and the U.S. economy for the AP for 16 years.

"While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers," Powell said. "This unusual situation suggests that downside risks to employment are rising, and if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment."

"The effects of tariffs on consumer prices are now clearly visible. We expect those effects to accumulate over coming months, with high uncertainty about both timing and amounts. The question that matters for monetary policy is whether these price increases are likely to materially raise the risk of an ongoing inflation problem," Powell said.

"A reasonable base case is that the effects will be relatively short-lived, a one-time shift in the price level. Of course, one time does not mean all at once. It will continue to take time for tariff increases to work their way through supply chains and distribution networks. Moreover, tariff rates continue to evolve, potentially prolonging the adjustment process," he continued.

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