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.

Markets rose Friday after Federal Reserve Chair Jerome Powell appeared to open the door to lowering interest rates, something analysts say would help boost overall activity in the U.S. economy but at the risk of spurring inflation.