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Jerome Powell, the head of the US central bank, hinted at a potential interest rate cut in September during a speech at Jackson Hole, Wyoming. Powell also addressed the temporary inflationary impact of President Trump's tariffs but did not directly mention the political pressure he has faced or Trump's calls for his removal.

The shift towards a more accommodative stance on borrowing costs led to a rise in share prices. Economists and investors were already anticipating a decrease in borrowing rates due to recent weaknesses in the US job market. Powell acknowledged the risks to inflation and employment, stating that the effects of tariffs on consumer prices were becoming evident.

Powell emphasized the importance of balancing growth with inflation control. He mentioned that interest rates were currently high enough to dampen economic activity and suggested that adjusting the policy stance might be necessary. Powell cautioned against assuming a September rate cut was guaranteed, emphasizing that monetary policy decisions are data-driven.

Investors reacted positively to Powell's speech, with US share indexes rising significantly. While the possibility of a rate cut in September seems likely, economic data in August could still influence the decision. Powell's term as chairman of the Federal Reserve is set to end in May 2026, having been appointed by President Trump in 2017.