Current Affairs Of Pakistan & World: Powell puts rate cut on the table

Powell puts rate cut on the table

Aug 22, 2025

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THE CATCH-UP

Chair of the Board of Governors of the Federal Reserve System Jerome Powell speaks during an event hosted by the Economic Club of Chicago, Wednesday, April 16, 2025, in Chicago. (AP Photo/Erin Hooley)

Fed Chair Jerome Powell noted that the central bank faces a tricky balancing act as it stares down rising unemployment numbers and increasing inflation. | Erin Hooley/AP

FED UP — Federal Reserve Chair Jerome Powell signaled the central bank could lower interest rates as soon as next month — but still urged a cautious approach in a highly anticipated speech today in Jackson Hole, Wyoming.

Bookending a three-day conference, Powell noted that the central bank faces a tricky balancing act as it stares down rising unemployment numbers and increasing inflation.

“The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell told attendees. “That suggests the Fed will continue to evaluate jobs and inflation data as it decides whether to cut rates, including at its next meeting [in September.]”

Powell added the labor market remains in a “curious kind of balance” between supply and demand for workers. “In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside — a challenging situation,” he said.

Powell “indicated that he’s more worried about economic weakening than a sustained increase in inflation,” POLITICO’s Victoria Guida writes from Jackson Hole, “and then used key central banker wording to suggest that he’s leaning toward a rate cut: ‘The shifting balance of risks may warrant adjusting our policy stance.’”

The cautious approach from Powell is nothing new, and President Donald Trump has repeatedly called for his resignation while demanding further reductions. While Powell has side-stepped Trump’s pressure campaign, he subtly acknowledged Trump’s attacks today by reiterating any decision on cuts is ultimately up to the Fed — not the president.

The decision will be “based solely on [Fed officials’] assessment of the data and its implications for the economic outlook and the balance of risks,” he said. “We will never deviate from that approach.”

The signal of nearing cuts was also embraced on Wall Street, with investors pushing the Dow, S&P 500 and Nasdaq markets toward what might be their biggest single-day gains since May, per CNN.

Trump notably has not yet weighed in on Powell’s speech, but the president is still exerting pressure on the Fed. As Powell spoke, Trump doubled down on his threats to oust Federal Reserve Governor Lisa Cook over accusations of mortgage fraud, telling reporters he would “fire her if she doesn’t resign,” Bloomberg’s Skylar Woodhouse reports. Trump had previously called for Cook’s resignation on Wednesday. Powell did not address the claims in his remarks.

So what now? The Fed’s next rate decision will come in mid-September. Expect plenty of eyes on the Labor Department’s August jobs report, which is scheduled for release on Sept. 5 — the first under newly installed Bureau of Labor Statistics Director E.J. Antoni.

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6 THINGS YOU NEED TO KNOW

FBI agents carry empty boxes to former national security adviser John Bolton's house, Friday, August. 22, 2025, in Bethesda, Md. (AP Photo/Jose Luis Magana)

FBI agents carry empty boxes to former national security adviser John Bolton's house on Friday. | AP

1. KNOCK KNOCK: Federal agents searched the Maryland home of John Bolton this morning, leading to a slew of vague comments from current officials hinting at potential wrongdoing, POLITICO’s Josh Gerstein and Gigi Ewing report. The embattled former Trump adviser came under investigation during Trump’s first term over a tell-all book about his time in the administration, culminating in a failed DOJ suit attempting to block its publication. He was also the subject of a failed DOJ suit over the handling of classified information.

The view from the White House: “Classified documents are certainly part of it, but I think that there's a broad concern about Ambassador Bolton,” VP JD Vance tells NBC’s Kristen Welker in a clip from an interview taped this morning. “They’re going to look into it. And like I said, if there’s no crime here, we’re not going to prosecute it. If there is a crime here, of course, Ambassador Bolton will get his day in court.”

Vance adamantly denied that Bolton is being targeted because of his past criticism of Trump: “We’re going to be deliberate about that, because we don’t think that we should throw people even if they disagree with us politically, maybe especially if they disagree with us politically, you shouldn’t throw people willy-nilly in prison. You should let the law drive these determinations, and that’s what we're doing.”

How the search went down: “A few local police cars were stationed across the street from Bolton’s house outside Washington as FBI agents passed in and out” this morning, per the AP. “The tan-and-brick structure is set back from a two-lane road on a leafy suburban street.” As reporters searched his home, Bolton was spotted speaking to agents outside his D.C. office.

The official response: “The FBI is conducting court authorized activity in the area. There is no threat to public safety. We have no further comment,” a spokesman told Josh and Gigi. FBI Director Kash Patel said on X: “NO ONE is above the law… @FBI agents on mission.” Added AG Pam Bondi on X: “America’s safety isn’t negotiable. Justice will be pursued. Always.”

2. WHO’S IN CHARGE HERE?: Trump’s federal takeover of the D.C. police force has led to widespread confusion inside MPD on the chain of command, with many officers wondering whether they still answer to D.C. Police Chief Pamela Smith — and where she’s been in recent weeks, per WaPo. Though Trump’s attempt to replace Smith was blocked by the courts, officers say “the chief has disappeared amid the pressure and alienated her staff” in recent weeks.

Staff say there’s been sparse communication from the leader, who had already earned a reputation for “berating her staff at crime briefings and meetings of the command staff and executive staff, embarrassing commanders over minor missteps or behavior she perceived as a slight to her authority. … Smith declined to answer questions about her leadership, other than to say that she remained engaged with her staff.”

Up in arms: The National Guard force patrolling D.C. have now been granted permissions from the Defense Department to carry “service-issue weapons, consistent with their mission and training,” POLITICO’s Nicole Markus and Paul McLeary report. Though Trump has emphasized the federal officers are tasked with controlling crime in across the city, many of the troops are “deployed in high-tourist areas like Union Station, near the Washington Nationals ballpark and in metro stations.”

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3. RUSSIA-UKRAINE LATEST: Russian Foreign Minister Sergey Lavrov confirmed this morning that no meeting has been set between Ukrainian President Vladimir Putin and Ukraine’s Volodymyr Zelenskyy as both countries remain locked in a standstill over a peace deal to end the four year war, Lavrov said in an exclusive interview with NBC’s Kristen Welker. Lavrov laid out in no uncertain terms that the Kremlin is waiting on Ukraine to take action before agreeing to a summit. “Putin is ready to meet with Zelenskyy when the agenda is ready for a summit, and this agenda is not ready at all,” Lavrov said. “There is no meeting planned.”

4. WAKE ME UP WHEN SEPTEMBER ENDS: OPM Director Scott Kupor said the White House is expecting some 300,000 fewer federal workers on the government payroll by the end of the year, marking “the largest single-year reduction” in the federal workforce since World War II, NYT’s Eileen Sullivan reports. Kupor explained that DOGE’s mass resignation incentives are the bulk, adding he “did not expect significant new layoffs” before the end of the fiscal year on Sept. 30. But but but: “[W]hether the cuts have made the government slim enough for Mr. Trump remains to be seen,” with Kupor admitting “he did not know if the White House would ask agencies for more reductions as planning begins for fiscal year 2027.”

5. PALMETTO POWER PLAY: South Carolina’s gubernatorial race has evolved into a brawl over who can curry Trump’s favor and secure a formal endorsement. The candidates are “personally sending him positive polls and employing his top allies to mimicking his signature catchphrases and policy proposals,” NBC’s Melanie Zanona and colleagues report. “Some of Trump’s closest political allies in South Carolina are cautioning him to be patient as the open-seat race evolves” while “candidates are vying to position themselves as his obvious choice.”

6. PRIVATE PRACTICE: Trump’s second-term agenda has allowed him to infiltrate the private business sector at an unprecedented level, POLITICO’s Sam Sutton writes in a 30,000-foot look. The president’s interest in private companies and dealmaking “has shaken the guardrails that protect businesses from sudden political shifts” and is a major shift from the “free-market orthodoxy that was a hallmark of Republican economic policymaking.” But where the administration “sees upside, free market types see peril,” and Trump’s direct involvement has injected uncertainty into markets. “That has further scrambled the ability of corporate decision-makers to strategize against an already unpredictable U.S. policy environment.”

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TALK OF THE TOWN

FIRST IN PLAYBOOK — Mary Beth Sheridan, WaPo’s longtime Mexico bureau chief, has taken the buyout and leaves at the end of August, POLITICO’s Daniel Lippman reports. Sheridan, who’s been part of teams that were Pulitzer finalists, spent 24 years at the paper covering immigration, homeland security and the State Department and was also a foreign editor.

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