US Federal Reserve Chair Jerome Powell says the economy has turned a corner in the fight against inflation and that policymakers will begin cutting interest rates.

Powell made the remarks at the annual Jackson Hole Economic Symposium in Wyoming. The conference brings together central bankers, policymakers, scholars and other prominent economists from around the world.

Powell said: "The time has come for policy to adjust. 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 signaled that the cuts could happen at the Fed's next meeting in September. It would be the first such move for the Fed since March 2020 and the start of the pandemic.

Since then, policymakers have been trying to tackle record-high inflation by tightening monetary policy. They raised interest rates to highs not seen in 23 years.

Powell indicated caution that the US might slip into a recession. Although inflation is slowing down, the unemployment rate has increased for four straight months. He noted the labor market has cooled off from its "overheated" state.

Powell said, "We do not seek or welcome further cooling in labor market conditions."

Although Powell did not mention the range or pace of the rate cuts, market players continue to keep a close eye on the Fed's decision, as it significantly impacts exchange rates and stock prices.