Federal Reserve Chair Jerome Powell said “the time has come” for the central bank to adjust its monetary policy, signaling that rate cuts could soon lower borrowing costs for American consumers and businesses.

Powell, who spoke at an annual conference of central bankers in Jackson Hole, Wyoming, didn’t disclose specifics about when a rate cut could arrive, or its size, although economists have penciled a reduction at the Fed’s September 18 meeting. The federal funds rate now stands in a range of 5.25% to 5.5%, its highest level in 23 years. 

In conveying that the Fed is likely to start cutting its benchmark rate, Powell cited some weakening in the labor market, as well as progress in battling high inflation. A slowdown in hiring and an uptick in the unemployment rate last month heightened concerns the Fed could mistake in the other direction, keeping rates too high for too long, throttling growth and plunging the economy into recession.

“We do not seek or welcome further cooling in labor market conditions,” Powell said in his speech.

“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,” he said.

– With reporting by the Associated Press. This is a breaking story and will be updated.