JACKSON HOLE, Wyoming, Aug 23 (Reuters) - Federal Reserve Chair Jerome Powell said on Friday "the time has come" for the U.S. central bank to cut interest rates as rising risks to the job market left no room for further weakness and inflation was in reach of the Fed's 2% target, offering an explicit endorsement of an imminent policy easing.
"The upside risks to inflation have diminished. And the downside risks to employment have increased," Powell said in a highly anticipated speech to the Kansas City Fed's annual economic conference in Jackson Hole, Wyoming. "The time has come for policy to adjust. 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."
Referencing the two goals that the Fed is tasked by Congress to achieve, Powell said his "confidence has grown that inflation is on a sustainable path back to 2%," after rising to about 7% during the COVID-19 pandemic, while unemployment is increasing.
While Powell said the jump of nearly a percentage point in the unemployment rate over the past year was due largely to rising labor supply and slowed hiring, not increased layoffs, he also was emphatic that the Fed wanted to prevent any further erosion - his prior talk of labor market "pain" as necessary to control inflation now a thing of the past.

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