ET NEWS

Jackson Hole, Wyoming: Jerome Powell, the chair of the Federal Reserve, on Friday used a closely watched speech to send his strongest signal yet that the central bank is preparing to soon restart interest rate cuts, highlighting the labour market's vulnerabilities even as inflation accelerates.Powell held back from explicitly endorsing a reduction in borrowing costs at the Fed's next meeting in September. But his emphasis on the prospects of a weakening economic backdrop made clear that a cut is likely next month."The balance of risks appears to be shifting," Powell said in his final speech as Fed chair at an annual conference hosted by the Reserve Bank of Kansas City in Jackson, Wyoming. With borrowing costs weighing on the economy, the labor market softening and inflation risks contained, "the shifting balance of risks may warrant adjusting our policy stance," said the chair.Powell highlighted the recent slowdown in monthly jobs growth, but questioned whether it was a function of a pullback in demand from companies or a reduction in the supply of workers resulting from President Donald Trump's immigration crackdown. He said that left the labour market in a "curious kind of balance" that warranted caution."This unusual situation suggests that downside risks to employment are rising," he said. "And if those risks materialise, they can do so quickly in the form of sharply higher layoffs and rising unemployment."Powell stressed, however, that inflation was still too high even as he sought to push back on concerns that Trump's tariffs would lead to a persistent rise in price pressures. Rather he said a "reasonable base case is that the effects will be relatively short-lived - a one-time shift in the price level.""Of course, 'one-time' does not mean 'all at once.' It will continue to take time for tariff increases to work their way through supply chains and distribution networks," he added.Still, Powell acknowledged that the Fed was in a "challenging situation" given that the central bank's two goals of low, stable inflation and a healthy labor market are now in tension with one another. Against this backdrop, he said, the Fed would need to "proceed carefully" with its plans to reduce the degree of restraint it is imposing on the economy.That suggests that once the Fed starts cutting, it will not reduce interest rates quickly or by much if the economy evolves as expected. Powell reiterated Friday that he viewed the central bank's policy settings as only "modestly" restrictive, meaning there is not too far to go in terms of interest rate reductions before hitting the Fed's desired level. The central bank is aiming for a "neutral" setting that neither revs up the economy nor slows it down.Powell's speech is typically the top billing of the three-day gathering, which brings together central bankers from around the world, current and past government officials and academics. Powell was met with resounding applause and a standing ovation before he began speaking.

Mumbai: Equities ended lower Friday, snapping a six-day gaining streak, as investors booked profits amid concerns over additional 25% US tariffs on Indian exports taking effect next week. The Centre's proposed indirect tax streamlining, which boosted the gauges earlier this week, failed to influence the market's direction in the absence of fresh positive cues.The Nifty fell 213.65 points, or 0.85%, to close at 24,870.1. The Sensex declined 693.86 points, or 0.85%, to end at 81,306.85. Both benchmark indices have ended the week nearly 1% higher, underpinned by prospects of lower producer levies stoking busy-season consumer demand."Markets saw some profit booking on Friday, despite ending the week in positive territory, largely due to global concerns and the potential imposition of an additional 25% tariff on India starting next week," said Pankaj Pandey, head of fundamental research, ICICI Direct.Pandey said banking and financial stocks have dragged the large cap recovery, weighed down by persistent foreign fund selling and amid expectations of further rate cuts next year, as lower GST rates cause consumer inflation gauge to head south.At the beginning of August, the US President put additional tariffs of 25% on top of existing 25% tariffs on Indian goods over its purchases of Russian oil, taking the total levy to 50%--among the highest on any country. The new tariffs will be implemented from August 27.Foreign portfolio investors net sold shares worth ₹1,623 crore. Domestic institutions were sellers to the tune of ₹329 crore.The Nifty Bank index was one of the top losers on Friday, down 1.1%. Nifty's Metal, Oil and Gas and FMCG indices declined 0.8-1.2% at close."Markets appear to have limited upside in the near term, weighed down by weak Q1 earnings, a lack of revival signals for Q2, ongoing tariff concerns, and stretched valuations," said Siddarth Bhamre, head of institutional research at Asit C. Mehta.123464339No Follow-ThroughBhamre said while the recent GST rate cuts sparked initial optimism, the limited price impact is unlikely to drive meaningful incremental demand, as reflected in the absence of sustained buying after Monday. Elsewhere in Asia, Japan remained flat, China advanced 1.5%, Hong Kong and South Korea rose 0.9% and Taiwan dropped 0.8%.The pan-Europe index Stoxx 600 was up 0.2% at the time of going to print."We believe most of the negative news is already priced in. Any positive developments in consumption trends or tariff negotiations could support a recovery and further rally," said Pandey.He expects the Nifty to hold the 24,500 levels, with resistance around 25,400 levels.Nifty's Volatility Index or VIX- known as the market's fear gauge, went up 3.1% to 11.7 levels on Friday.

US President Donald Trump has nominated his longtime aide Sergio Gor, who is currently the Director of the White House Presidential Personnel Office, as the next US Ambassador to India. In a social media post on Friday, Trump said Gor, 38, is a "great friend, who has been at my side for many years". "I am pleased to announce that I am promoting Sergio Gor to be our next United States Ambassador to the Republic of India," he said. He would also serve as a special envoy for South and Central Asian affairs, Trump said. The announcement comes amid tariff tensions between Washington and New Delhi. Trump said Gor and his team had overseen the hiring of nearly 4,000 officials across federal departments and agencies "in record time," adding that over 95 per cent of positions were now filled. Gor will remain in his current role at the White House until his confirmation, he said. "Gor has worked on my historic presidential campaigns, published my best-selling books, and ran one of the biggest Super PACs, which supported our movement," Trump wrote. The president described Gor's role in the administration as "essential" in delivering on his political mandate. "For the most populous region in the world, it is important that I have someone I can fully trust to deliver on my agenda and help us make America great again. Sergio will make an incredible Ambassador. Congratulations Sergio!" Trump said. Gor in a social media post said he is "beyond grateful" to Trump for his incredible trust and confidence in nominating him to be the next US Ambassador to India and Special Envoy for South and Central Asian Affairs. "It will be the honour of my life to represent the United States," he said. Vice President JD Vance in a social media post said Gor "will make a fantastic ambassador for our country to India". Gor will succeed Eric Garcetti, who served as ambassador from May 2023 to January 2025.

The Goods and Services Tax (GST) Council will hold its 56th meeting on September 3 and 4, 2025, in New Delhi. The meeting will begin at 11 am on both days, according to a communication issued to members.Ahead of the Council meeting, an officers’ meeting is scheduled for September 2, also in New Delhi. The agenda for both meetings, along with details of the venue, will be shared later, the communication said.All members of the GST Council have been invited to participate in the deliberations.The council, comprising finance ministers of all states and UTs besides the Centre, will deliberate on the recommendations by the three GoMs on rate rationalisation, compensation cess and health and life insurance.The GoM comprising state ministers met earlier this week and, in principle, agreed to the Centre's proposal for a two-slab GST, reported PTI.According to the reform proposed by the Centre to the GoMs, Goods and Services Tax (GST) should be a two-rate structure of 5 and 18 per cent, classifying goods and services as 'merit' and 'standard'. A special rate of 40 per cent will be levied on select few items like ultra-luxury cars and sin goods.Currently, GST is a 4-tier structure of 5, 12, 18 and 28 per cent.