Fed’s Powell highlights slowing job market in signal that rate cuts may be nearing

CHRISTOPHER RUGABER

WASHINGTON (AP) — The Federal Reserve faces a cooling job market as well as persistently high prices, Chair Jerome Powell said in testimony Tuesday to Congress, a shift in emphasis away from the Fed’s single-minded fight against inflation of the past two years that suggests it is moving closer to cutting interest rates.

The Fed has made “considerable progress” toward its goal of defeating the worst inflation spike in four decades, Powell told the Senate Banking Committee.

“Inflation has eased notably” in the past two years, he added, though it still remains above the central bank’s 2% target.

Powell pointedly noted that “elevated inflation is not the only risk we face.” Cutting interest rates “too late or too little could unduly weaken economic activity and employment,” he said.

The Fed chair addressed the Senate panel on the first of two days of semi-annual testimony to Congress. On Wednesday,