“A cut could be on the table at the September meeting,” Jerome Powell said Wednesday, stating the obvious after the Fed kept policy steady on the one-year anniversary of peak rates in the US.

Powell’s press conference revolved almost entirely around the shift in the Fed’s assessment of the balance of risks. The new statement language found the Committee indicating that officials are now just as attentive to rising unemployment as they are to the risk of rekindled inflation.

“I can imagine a scenario where there could be anywhere between [no] cuts and several cuts,” Powell said, in response to a question about the September dot plot refresh, which is still nearly two months away.

Wall Street Journal “Fed whisperer” Nick Timiraos wondered why restrictive policy’s still warranted if the labor market’s back in equilibrium. That, Powell responded, is precisely why the Fed changed the statement language around the balance of risks. “We are watching labor market conditions quite closely,” he told Timiraos. If the Fed sees something on the jobs front that looks like “more than” healthy normalization, monetary policy would respond.

Powell came back to that again and again — the notion that although the Fed still views the deceleration in hiring and other evidence of a softer jobs market as consistent with the rebalancing process, the Committee’s keenly aware that the situation could turn on a dime. He even indicated an aversion to additional labor market cooling, before walking it back. “I wouldn’t say I wouldn’t want to see any further cooling,” he clarified. The Fed doesn’t want to see a material slowdown. “We’re in a good place here,” Powell explained.

He characterized the jobs market midway through 2024 as akin to 2019’s labor market. “That was not an inflationary economy,” he said, adding that in his view, the jobs market “in its current state” isn’t likely to be a source of inflationary pressures. Note that ADP chief economist Nela Richardson said the same thing, almost verbatim, just hours earlier.

Powell was asked about slower hiring in the JOLTS report. Recall that aggregate hires fell 314,000 in the release, pushing the series to the lowest since the pandemic jobs purge in April of 2020. “All of the data points [in] kinda the direction we want to see,” Powell mused, adding that Wednesday’s update on the all-important Employment Cost Index “was a little softer than expected,” also good news. Wage increases, despite decelerating, are still strong. The ECI release suggested pay growth may soon settle at a robust, but sustainable, pace. That’s what you want: Strong, but also sustainable.

All in all, the data’s “broadly consistent with [a] normalization process,” Powell went on. The question is whether any nascent slowdown might be “more than normalization.” If it is, the Fed’s “well-positioned” to respond. The Fed’s focused on sticking the proverbial landing, he told Steve Liesman. “We don’t need to be 100% focused on inflation because of the progress we’ve made,” Powell said. “We can afford to begin to dial back the restriction. You would think, in a base case, that policy rates would move down from here.”

Yes, you would think that. And markets do. Powell made it abundantly clear on Wednesday that most officials generally agree. It’s just a matter of getting a little more data, which is to say the Fed wants to hold out as long as possible to be sure the job’s done. Powell told WaPo‘s Rachel Siegel that the disinflation the Fed’s seeing now is better than what the Committee saw last year. “This is a broader disinflation,” he said. “But so far it’s only a quarter. The job is not done — I want to stress that — but we need to weigh the risks to the labor market.”

Asked by Fox if the Fed considered cutting rates on Wednesday, Powell said there was, in fact, “a real back and forth” about the case for moving at this meeting, although he didn’t indicate there was any serious discussion of pulling the trigger.

A reporter from Politico asked about the Sahm rule, which is one uptick on the UNR rate from triggering. “We’re aware of that rule,” Powell replied, before emphasizing that even if it does trigger, a recession’s not guaranteed. “It’s a statistical thing. It’s not like an economic rule that’s telling us it must happen.” (Claudia Sahm herself last week said that although her rule is “currently sending the right cautionary message about the labor market cooling, the volume is too loud.” A recession, she wrote, isn’t imminent.)

When Bloomberg’s Michael McKee asked Powell if the Committee’s certain the Fed won’t fall behind the curve and accidentally let the jobs market deteriorate too much, Powell was honest. “‘Certainty’ is not a word that we have in our business,” he said.