By CHRISTOPHER RUGABER AP Economics Writer

JACKSON HOLE, Wyo. (AP) — Federal Reserve Chair Jerome Powell on Friday opened the door ever so slightly to lowering a key interest rate in the coming months but gave no hint on the timing of a move and suggested the central bank will proceed cautiously as it continues to evaluate the impact of tariffs and other policies on the economy.

In a high-profile speech closely watched at the White House and on Wall Street, Powell said that there are risks of both rising unemployment and stubbornly higher inflation. Yet he suggested that with hiring sluggish, the job market could weaken further.

“The shifting balance of risks may warrant adjusting our policy stance,” he said, a reference to his concerns about weaker job gains and a more direct sign that the Fed is considering a rate cut than he has made in previous comments.

Still, Powell’s remarks suggest the Fed will proceed carefully in the coming months and will make its rate decisions based on how inflation and unemployment evolve. The Fed has three more meetings this year, including next month, in late October, and in December, and it’s not clear whether the Fed will cut at all those meetings.

“The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said. That suggests the Fed will continue to evaluate jobs and inflation data as it decides whether to cut rates.

The stock market jumped in response to Powell’s remarks, with the broad S&P 500 index rising 1.5% in midday trading.

“We see Powell’s remarks as consistent with our expectation of” a quarter-point cut to the Fed’s short-term rate at its Sept. 16-17 meeting, economists at Goldman Sachs wrote in a note to clients. The Fed’s rate currently stands at 4.3%.

Powell spoke with the Fed under unprecedented public scrutiny from the White House, as President Donald Trump has repeatedly insulted Powell and has urged him to cut rates, arguing there is “no inflation” and saying that a cut would lower the government’s interest payments on its $37 trillion in debt.

Trump also says a cut would boost the moribund housing market. A rate cut by the Fed often leads to lower borrowing costs for mortgages, car loans, and business borrowing, but it doesn’t always.

While Powell spoke, Trump elevated his attacks, telling reporters in Washington, D.C. that he would fire Federal Reserve Governor Lisa Cook if she did not step down over allegations from an administration official that she committed mortgage fraud.

If Cook is removed, that would give Trump an opportunity to put a loyalist on the Fed’s governing board. The Fed has long been considered independent from day-to-day politics. The president can’t fire a Fed governor over disagreements on interest rate policy, but he can do so “for cause,” which is generally seen as malfeasance or neglect of duty. (backslash)

Powell spoke at the Fed’s annual economic symposium in Jackson Hole, Wyoming, a conference with about 100 academics, economists, and central bank officials from around the world. He was given a standing ovation before he spoke.

Cook, who is also attending the conference, declined to comment on the president’s remarks.

In his remarks, the Fed chair underscored that tariffs are lifting inflation and could push it higher in the coming months.

“The effects of tariffs on consumer prices are now clearly visible. We expect those effects to accumulate over coming months, with high uncertainty about timing and amounts,” Powell said.

Inflation has crept higher in recent months though it is down from a peak of 9.1% three years ago. Tariffs have not spurred inflation as much as some economists worried, but they are starting to lift the prices of heavily imported goods such as furniture, toys, and shoes.

Consumer prices rose 2.7% in July from a year ago, above the Fed’s target of 2%. Excluding the volatile food and energy categories, core prices rose 3.1%.

Powell added that higher prices from tariffs could cause a one-time shift to prices, rather than an ongoing bout of inflation. Other Fed officials have said that is the most likely outcome and as a result the central bank can cut rates to boost the job market.

The Fed chair said it is largely up to the central bank to ensure that tariffs don’t lead to sustained inflation.

“Come what may, we will not allow a one-time increase in the price level to become an ongoing inflation problem,” he said, suggesting deep rate cuts, as Trump has demanded, are unlikely.

Regarding the job market, Powell noted that even as hiring has slowed sharply this year, the unemployment rate remains low. He added that with immigration falling sharply, fewer jobs are needed to keep unemployment in check.

Yet with hiring sluggish, the risks of a sharper downturn, with rising layoffs, has risen, Powell said.

Powell also suggested the Fed would continue to set its interest-rate policy free from political pressure.

Fed officials “will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks. We will never deviate from that approach.”

Powell dedicated the second half of his speech to announcing changes to the Fed’s policy framework that was issued in August 2020. The framework, which has been blamed for delaying the Fed’s response to the pandemic inflation spike, provides guidelines on how the Fed would respond to changes in inflation and employment.

In 2020, after a decade of low inflation and low interest rates following the financial crisis and Great Recession in 2008-2009, the Fed changed its framework to allow inflation to top its 2% target temporarily, so that inflation would average 2% over time.

And after unemployment fell to a half-century low in 2018, without pushing up inflation, the 2020 framework said that the Fed would focus only on “shortfalls” in employment, rather than “deviations.” That meant it would cut rates if unemployment rose, but wouldn’t necessarily raise them if it fell.

The Fed reviewed its framework this year and concluded that it was tied too closely to the pre-pandemic economy, which has since shifted. Inflation spiked to a four-decade high in 2022 and the Fed rapidly boosted interest rates afterward.

“A key objective has been to make sure that our framework is suitable across a broad range of economic conditions,” Powell said.