“The time has come for policy to adjust,” Powell said in a Friday speech from Jackson Hole, Wyo. that looked back over the monetary response to the pandemic. 

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell said. 

Powell noted weaker labor conditions, saying the “labor market has cooled considerably from its formerly overheated state,” though he qualified that unemployment is still low by historical standards. 

The unemployment rate rose to 4.3 percent in July, nearly a full percentage point above last year’s low of 3.4 percent. 

A majority of interest rate traders expect a quarter percentage point rate cut when the Fed meets again in mid-September, according to the CME Fed Watch prediction algorithm, although around one-third think it could be as much as a half percentage point. 

Powell’s Friday speech had a tone of finality and retrospection regarding the economic conditions of the post-pandemic years that have baffled many policymakers. 

The Hill’s Tobias Burns has more here.