FX.co ★ Powell Warns of Slowing Job Market

During the NABE conference in Philadelphia, Federal Reserve Chair Jerome Powell highlighted that economic activity is slightly exceeding expectations, yet he signaled growing concerns regarding employment risks. Powell stated, "Although the unemployment rate stayed low through August, there's been a notable deceleration in payroll increases. This trend can likely be attributed in part to slowed labor force expansion due to decreased immigration and declining participation rates. In this less dynamic and somewhat softened labor market, employment risks appear to have increased." Furthermore, Powell suggested that the Federal Reserve might soon conclude its balance-sheet runoff, pointing out that liquidity conditions are becoming progressively tighter. He warned that postponing policy action could exacerbate the effects of tariffs and potential job losses. The absence of crucial data recently has further complicated the outlook for policy decisions.