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Powell says interest-rate cut 'on the table' in September if inflation eases again

Fed is more worried about the U.S. jobs market

Federal Reserve chief Jerome Powell said a reduction in U.S. interest rates is "on the table" in September if inflation slows further like it has in the past several months.

"The question will be whether the totality of the data ... are consistent with rising confidence on inflation and maintaining a solid labor market," Powell told reporters Wednesday.

"If that test is met, a reduction in our policy rate could be on the table as soon as our next meeting in September," he said.

The stock market rallied after Powell's remarks.

Read: Stock market surges after Powell affirms September Fed rate cut could be on the table

After jacking up borrowing costs starting in early 2022, the Fed has held its benchmark rate at a 23-year high for the past year. Inflation has moderated in a bumpy fashion back to a 2.5% annual pace.

The Fed is aiming to get inflation down to 2%, but top officials have made it clear they won't wait until they reach their target before cutting rates.