Jerome H. Powell said the “balance of risks” across the economy had started to shift, raising the odds the central bank lowers borrowing costs at its next meeting in September.

Federal Reserve Chair Jerome Powell carefully opened the door to an interest-rate cut in September, pointing to rising risks for the labor market even as worries over inflation remain.

Stocks closed significantly higher on Friday after Federal Reserve Chair Jerome Powell signaled a possible interest rate cut during a high-profile speech at an annual gathering in Jackson Hole, Wyoming.