02:33 PM EDT, 08/22/2025 (MT Newswires) -- Federal Reserve Governor Jerome Powell (voter) left open the door to a September rate cut in his Friday speech at Jackson Hole, saying that downside risks to the employment mandate have increased, but he also said that the Federal Open Market Committee remains data-dependent and that the impact of tariffs on inflation may have only begun.

Powell acknowledged that a change in the stance of policy may be warranted if the employment picture continues to deteriorate but said that the 100 basis points of rate reduction over the last year gives the FOMC more time to be certain before acting.

Signs of tariff impacts are beginning to be seen in the inflation data and that those effects could accumulate over coming months with the magnitude and timing highly uncertain, he said, adding that it will take some time for the tariffs to work their way through the economy.

Powell also detailed changes to the Fed's policy framework that would allow the employment side of the Fed's dual mandate to grow above trend without the FOMC reactively raising rates, as long as that growth is not expected to trigger inflation.

Recent comments of note:

(Aug. 21) Cleveland Fed President Beth Hammack (nonvoter) said that recent economic data do not call for a rate cut at the September FOMC meeting but she is maintaining an open mind and there is significant amount of data to come before the meeting.

(Aug. 21) Kansas City Fed President Jeffrey Schmid (voter) said that there is a significant amount of information to be released before the Sept. 16-17 FOMC meeting but that the economy remains strong and it is hard to see where the level of the federal funds rate is restricting economic activity.

(Aug. 21) Atlanta Fed President Raphael Bostic (nonvoter) said that inflation remains above the Fed's target rate of 2% while unemployment is still low by historical standards. Bostic added that when the FOMC moves, he wants to be sure that it is in one direction without the need to quickly raise rates again. Bostic said that the current level of the federal funds rate is "marginally restrictive" but not "super restrictive."