Throughout the year, Federal Reserve Chair Jerome Powell and his colleagues have held rates steady, pointing to a solid labor market and uncertainty over the inflation outlook given large tariff hikes. But Powell suggested the outlook was changing in a direction that could justify a resumption of rate cuts in a widely watched address at a conference in Wyoming on Friday. The labor market has moved front and center for the Fed, highlighting its fragility and risk to the economy. Friday’s data on July PCE inflation—the Fed’s preferred measure of inflation—will be the next key item of U.S. data ahead of the central bank’s September policy meeting.

Federal Reserve Chair Jerome Powell cautiously laced up an interest-rate cut next month but delivered a subtle message to anyone expecting aggressive easing: Don’t expect a downhill sprint.

The debate among central bankers gathered in Wyoming’s Grand Teton National Park over the past two days suggests the focus is now shifting beyond the September meeting to whether the Fed will entertain cutting again at either of its final two meetings of the year, in October and December.

Powell’s cautious tone reflected the tricky economic dynamics the Fed is grappling with: a labor market he described as showing “curious” signs of softness despite a low unemployment rate, and tariff-driven price increases that are just beginning to work their way through the economy.

• Powell Highlights Job Market Worries, Opening Path to Rate Cut
• Trump’s Pressure Campaign on the Fed Casts Shadow Over Jackson Hole Gathering
• Fed Officials Erase Old Policy That Tolerated Higher Inflation
• U.S. PCE Inflation Data in Focus as Fed Rate Cut Looks Likely

• How a Historic Immigration Drop Is Changing the Job Market

8:30 a.m.: Chicago Fed National Activity Index (CFNAI)
10 a.m.: New Residential Sales
10:30 a.m.: Texas Manufacturing Outlook Survey
7 p.m.: U.S. President Donald Trump hosts South Korean President Lee Jae-myung at the White House

8 a.m.: Federal Reserve Bank of Richmond President Thomas Barkin speaks before the Montgomery County Chamber of Commerce
8:30 a.m.: Advance Report on Durable Goods
9 a.m.: S&P CoreLogic Case-Shiller Indices
10 a.m.: Richmond Fed Business Activity Survey
10 a.m.: Consumer Confidence Index

Wall Street was ready to be disappointed by Fed Chair Jerome Powell on Friday. It was pleasantly surprised instead.

A survey of traders by Spectra Markets had found roughly 44% of respondents expected a “hawkish” or “extremely hawkish” speech by Powell. Only 9% expected a “dovish” speech, while the rest anticipated remarks that didn’t lean in either direction.

In an interview Thursday, Cleveland Fed President Beth Hammack said the labor market remains “reasonably good,” creating no reason to lower interest rates at the Sept. 16-17 policy meeting. Hammack is a nonvoting participant at Fed meetings this year.

Powell on Friday struck a different tone, however, highlighting the labor market’s vulnerabilities and signaling openness to a rate cut—a message that has sparked big rallies in both stocks and bonds. — Sam Goldfarb

• The Trump administration has a new weapon at its disposal in its efforts to take down Democrats and their appointees: mortgage records.
• When President Trump gets in on a new online moneymaking idea, his followers often pile in—but two out of the last three times, they went on to lose bigly. Now the first family is trying again and the idea, at least, is intriguing.
• Canada said it would remove its 25% tariff on about half of the U.S. goods it has targeted since March as the country attempts to reset its trading relationship with the U.S.
• German business confidence improved slightly this month, a survey showed, offering a glimpse of hope for an economy struggling to gain momentum.
• Germany’s manufacturing-heavy, export-oriented economy never recovered from the shocks of the Covid pandemic, Russia’s attack on Ukraine and the political backlash against globalization.
• Ukraine’s attacks on Russian oil-export infrastructure—encouraged in recent days by President Trump—have exposed how deeply parts of Europe still rely on Moscow’s hydrocarbon exports and pipelines.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.