Now that Federal Reserve Chair Jerome Powell has signaled that the central bank could soon cut its key interest rate, he faces a new challenge: how to do it without seeming to cave to the White House's demands.

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 chairman Jerome Powell signaled a possible interest rate cut in the months to come, sending stocks sharply higher.