Federal Reserve Chair Jerome Powell shared some upbeat news as we head into the weekend: The Fed is finally ready to cut interest rates. 

Speaking at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming, on Friday, Powell gave the clearest indication yet that the Fed was ready to slash interest rates at its next meeting in September. Noting that the unemployment rate has ticked up—moving to 4.3% from 3.7% in January—Powell said, “the time has come for the policy to adjust.” Also, a likely influence was a recent revision to employment statistics, which showed the U.S. overestimated the number of jobs created between March 2023 and March 2024 by more than 800,000.

The markets, which have long awaited a rate cut, jumped after Powell’s comments on Friday. The S&P 500, along with the Dow Jones Industrial Average and NASDAQ, increased more than 1% as of 11:30 a.m. ET.

“Overall, the economy continues to grow at a solid pace. However, the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished. And the downside risks to employment have increased,” he said.

The Fed has a dual mandate: to keep prices stable, targeting 2% inflation per year, and to keep unemployment low. As prices rose in recent years, the Fed raised rates accordingly to try to temper demand and help lower prices. That has seemingly worked, as the latest CPI report showed price increases of 2.9% during July. That’s still higher than the 2% target but down significantly from its recent peak of 9.1% in June 2022. 

But in balancing inflation with employment, the tide has seemingly turned, and the Fed is ready to target rising unemployment—which, it should be noted, is still relatively low by historical standards.

As such, it’s as likely as ever that the Fed will cut interest rates next month, which should help juice the economy a bit and theoretically lower unemployment. The Fed’s next meeting is on September 17 and 18. However, it’s unknown by how much the Fed will reduce rates—the federal funds rate is currently 5.33%, and the Fed hasn’t changed its position in more than a year. 

Powell said that the Fed’s next moves will ultimately be determined by the data. Specifically, that’ll likely include the upcoming Personal Consumption Expenditures index, which will be released on August 30; August’s jobs report, which will be released on September 6; and the next CPI report, which is due on September 11.

“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,” Powell said.