Powell "joins" the dovish camp, stating that economic risks provide a stronger rationale for interest rate cuts.

Federal Reserve Chairman Powell said that the continuously "changing" economic risks give the Fed more reasons to cut interest rates. His remarks indicate that Powell is leaning towards the "dovish" camp within the Federal Open Market Committee responsible for setting rates, and suggest that he may support a 25 basis point rate cut at the next meeting in September. Although Powell acknowledged that the impact of government trade wars on consumer prices is now "clearly visible," he implied that this impact is unlikely to persist and may instead be a one-off shock that the central bank can ignore. He said: "Given that the labor market is not particularly tight and facing increasing downside risks, this outcome seems unlikely." He also added, "Inflation faces upside risks, while employment faces downside risks, which presents a challenging situation."