NEW YORK (Reuters)

U.S. Federal Reserve Chair Jerome Powell on Friday hinted at a possible rate cut at the central bank’s September meeting but did not commit to it. He acknowledged growing risks to the job market and indicated that inflation risks remain.

“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,” said Powell at the Fed’s annual conference in Jackson Hole, Wyoming.

MARKET REACTION:

• STOCKS: U.S. stocks extended gains after Powell’s remarks.
• BONDS: U.S. Treasury yields dropped as Powell alluded to rate cuts.
• FOREX: The dollar fell following Powell’s comments.

COMMENTS:

Tom Graff, Chief Investment Officer, Facet, Phoenix, Maryland:
“Powell’s Jackson Hole speech was more dovish than many expected. He explicitly said that the ’shifting balance of risks may warrant adjusting our policy stance.’”
“It would take a major surprise in the data to prevent at least one cut.”

Drew Matus, Chief Market Strategist, MetLife Investment Management, New Jersey:
“The takeaway from Powell’s speech was that he acknowledged the rapid deterioration in the labor market. We expect 25-bps in September, just the first of a few cuts.”

Kim Forrest, Chief Investment Officer, Bokeh Capital Partners, Pittsburgh:
“The committee is open to a lower interest rate environment and we can expect a 25 basis-point rate cut.”

David Seif, Chief Economist for Developed Markets, Nomura, New York:
“This was generally a dovish speech, aligning with our view of a 25bp cut in September as the base case.”

Helen Given, Director of Trading, Monex USA, Washington:
“The dollar short is back, driven by Powell’s dovish tone and concerns over labor market weaknesses.”

Ipek Ozkardeskaya, Senior Analyst, Swissquote Bank, Switzerland:
“Jerome Powell’s dovish shift aims to support the weakening jobs market; a 25 basis-point rate cut is expected.”

Thomas Hayes, Chairman, Great Hill Capital LLC, New York:
“Chair Powell came in more dovish than expected and set the table for a September cut.”

Karl Schamotta, Chief Market Strategist, Corpay, Toronto:
“Powell emphasized downside risks to labor markets, pushing increased odds for a September rate cut.”

Jay Hatfield, Chief Executive Officer, Infrastructure Capital Management, New York:
“Powell’s dovish tone indicates a positive outlook for a September cut.”

Art Hogan, Chief Market Strategist, B Riley Wealth, New York:
“Powell’s comments signal that labor market weakness drives potential rate cuts moving forward.”

Brian Jacobsen, Chief Economist, Annex Wealth Management, Brookfield, Wisconsin:
“The Fed won’t ignore known risks to growth amid rising labor market concerns.”