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.

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 on Friday pointed to a possible interest rate cut at the U.S. central bank's meeting next month, but stopped short of committing to it, in remarks acknowledging both the growing risks to the job market and ongoing threat of higher inflation.