U.S. Federal Reserve Chair Jerome Powell has hinted that an interest rate cut could come as soon as next month, from the current range of four-point-25 to four-point-five percent.

In his final annual address as Fed chair at Jackson Hole, Wyoming on Friday, Powell said the steady unemployment rate and other labor market indicators allow for a more careful approach when considering changes to monetary policy.

With policy currently in “restrictive territory,” Powell explained that the Fed’s baseline outlook—combined with shifting risks—may justify adjusting the policy stance.

His comments come as the U.S. economy grew one-point-two percent in the first half of the year, down from two-point-five percent during the same period last year, amid a balance between the risk factors of inflation and employment.

Powell noted that the risk factors for inflation have tilted upward, while those for employment have tilted downward, resulting in a challenging situation.

He also pointed to the impact of the Trump administration’s tariff hikes and tighter immigration policies, saying they have influenced both inflation and jobs. He added that the inflationary effects could either be short-term or develop into a more continuous trend.