Fed chair highlights slowing job market

WASHINGTON — The Federal Reserve faces a cooling job market as well as persistently high prices, Chair Jerome Powell told Congress on Tuesday, a shift in emphasis that suggests the Fed is moving closer to cutting interest rates.

The Fed made "considerable progress" toward its goal of defeating the worst inflation spike in four decades, Powell told the Senate Banking Committee, though it still remains above the central bank's 2% target. Wednesday, the second of two days of semi-annual testimony to Congress, he will testify to a House committee.

From March 2022 to July 2023, the Fed raised its benchmark interest rate 11 times to a two-decade high of 5.3% to fight inflation. Powell noted "elevated inflation is not the only risk we face." Cutting interest rates "too late or too little could unduly weaken economic activity and employment," he said.