Stock market reacts positively to Fed Powell’s statements in Jackson Hole, Wyoming Friday, Aug. 22, 2025

Federal Reserve Chair Jerome Powell: Policy in modestly restrictive category, stability of unemployment … inflation risk to the upside, employment risk to the downside.

Labor market in a curious, kind of balance.

Slow down in job growth; slowdown much larger than previously believed.

Job growth slow down has not created a large slack in the labor market … other labor market indicators softened. Breakeven rate has been sharply lowered.

Labor market indicator softened, only modestly, and the break even rate has been sharply lowered

Risk to labor market can quickly create sharply, higher layoffs, and unemployment.

The effects of tariffs shall increase in the coming months.

Effects of tariffs on consumer prices now clearly visible.

Neutral level of rates may be higher than in the 2010s.

Higher tariffs to push prices in some categories.

Tariff effects will be relatively short term

Feds Powell says growth has slowed, especially in the first half … risk to lowered employment is a challenge.

Powell: Slightly dovish stability of unemployment rate allow allows us to proceed carefully.

Fed sees 2.9% core PCE in July.