Federal Reserve Chairman Jerome Powell is seen walking in Grand Teton National Park near Jackson Hole, Wyoming, on August 22, 2025.<\/p>\n
Natalie Behring | Getty Images News | Getty Images<\/p>\n
Since inflation in America peaked at 9.1% in June 2022<\/a>, the U.S. Federal Reserve has made controlling price increases \u2014 by keeping interest rates high \u2014 its main goal.<\/p>\n One consequence of tight monetary policy tends to be a slowing economy and a cooler labor market. For a while, that scenario didn’t materialize, leading many to think the Fed, under chair Jerome Powell’s piloting, had achieved the rare “soft landing<\/a>,” in which the central bank manages to dampen inflation without plunging the economy into a recession.<\/p>\n But that “golden path<\/a>” \u2014 as the Fed’s Austan Goolsbee likes to term it \u2014 is being tarnished by factors such as tariffs and a changing geopolitical landscape.<\/p>\n In the U.S., this has led to a rapidly cooling labor market<\/a>, prompting Powell to note at Jackson Hole that the risk between high inflation and high unemployment is “shifting.” In other words, the central bank might now turn its attention to supporting employment, rather than slowing price increases.<\/p>\n “The shifting balance of risks may warrant adjusting our policy stance,” Powell said.<\/p>\n And then \u2014 boom! Just like that: a glimpse of a shadow of a suggestion that the Fed might start lowering interest rates again was enough to send U.S. stocks surging and Treasury yields falling on Friday.<\/p>\n This proves how much the Fed \u2014 and, particularly, its chair \u2014 remains the nerve center of the U.S. economy and financial markets. As analysts of antiquity put it: all roads lead to Jerome.<\/p>\n What you need to know today<\/p>\n Jerome Powell indicates rate cuts may come soon. At Jackson Hole on Friday, the Fed chair said growing downside risks to the labor market may “warrant adjusting our policy stance<\/a>.” Powell also emphasized the Fed’s independence.<\/p>\n The U.S. government takes a 10% stake in Intel. The U.S. chipmaker, in a Friday press release<\/a>, said the White House made an $8.9 billion investment in Intel common stock<\/a>, purchasing 433.3 million shares at $20.47 per share \u2014 lower than the current price.<\/p>\n Furniture will face tariffs later this year, Trump said. The president’s goal is to “bring the Furniture Business back<\/a> \u2026 all across the Union.” Separately, Canada on Friday removed many of its retaliatory tariffs on the U.S.<\/a> \u2014 but not ones on autos and steel.<\/p>\n U.S. stocks popped Friday on Powell’s speech. The Dow Jones Industrial Average<\/a> hit a fresh high<\/a>, while the S&P 500<\/a> came within three points of its record during trading. The U.K.’s FTSE 100 closed at another high for its best week since May<\/a>.<\/p>\n [PRO] Nvidia and inflation in focus. U.S. stocks could end August on a high note<\/a>. Their continued rally will depend on Nvidia’s<\/a> earnings report, out Wednesday stateside, and the personal consumption expenditures price index, out Friday.<\/p>\n And finally…<\/p>\n Michael M. Santiago | Getty Images<\/p>\n From American Eagle to Swatch, why brands seem to keep getting it so wrong<\/a><\/p>\n