Federal Reserve Chair Jerome Powell expressed concerns to Congress about the cooling labor market, prompting speculation of an interest rate cut. Powell emphasized the need for a balanced approach to avoid both inflation and weakening the economy. Despite the recent uptick in unemployment to 4.1%, he maintained that the rate was still relatively low. Economists, like Ryan Sweet, predict a rate cut at the Fed's September meeting based on Powell's cautious testimony and the recent dip in annual wage growth. While the economy added 206,000 jobs in June, the private sector's performance was lackluster, leading to concerns about a potential rise in unemployment becoming self-sustaining. Powell's remarks reiterated the Fed's cautious approach to interest rate adjustments, with expectations of a potential rate cut in September.