US Federal Reserve Chairperson Jerome Powell opened the door to lowering interest rates, with the Dow closing at a fresh record for the first time since December, after the incessant US President Donald Trump’s pressure on Powell.

The Dow Jones Industrial Average added 1.9 percent to 45,631.74, while the broad-based S&P 500 advanced 1.5 percent to 6,466.91.

The tech-heavy Nasdaq Composite Index climbed 1.9 percent too to 21,496.54.

All three indexes were bolstered after Powell flagged the risks of higher inflation and a weakening jobs market at a central bankers conference in Jackson Hole, Wyoming.

Rising challenges

He noted that challenges to employment are growing and could materialize quickly in the form of layoffs.

“The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” he said, opening the door to a rate cut. This fueled expectations that the reduction could happen in the Fed’s September meeting.

Angelo Kourkafas of Edward Jones told AFP that “a September cut is not necessarily a done deal,” but Powell’s comments indicated the Fed is prepared to move rates lower if inflation remained relatively benign.

On Friday, Fitch Ratings also affirmed the United States’ credit rating at “AA+” with a stable outlook.

But it warned that “high fiscal deficits, a substantial interest burden, and high and rising government debt levels” constrain the rating.