Jackson Hole, Wyoming. With inflation nearly defeated and the job market cooling, the Federal Reserve is prepared to start cutting its key interest rate from its current 23-year high, Chair Jerome Powell said Friday.

Powell did not say when rate cuts would begin or how large they might be, but the Fed is widely expected to announce a modest quarter-point cut in its benchmark rate when it meets in mid-September.

"The time has come for policy to adjust," Powell said in his keynote speech at the Fed's annual economic conference in Jackson Hole, Wyoming. "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."

His reference to multiple rate cuts was the only hint that a series of reductions is likely, as economists have forecast. Powell emphasized that inflation after the worst price spike in four decades inflicted pain on millions of households, appears largely under control:

"My confidence has grown," he said, "that inflation is on a sustainable path back to 2 percent."

According to the Fed's preferred measure, inflation fell to 2.5 percent last month, far below its peak of 7.1 oercent two years ago and only slightly above the central bank's 2 percent target level.

The Fed chair also said that rate cuts should maintain the economy's growth and sustain hiring, which slowed last month. Continued growth could boost Vice President Kamala Harris' presidential campaign, even as most Americans say they are dissatisfied with the Biden-Harris administration's economic record, largely because average prices remain far above where they were before the pandemic.

"We will do everything we can," Powell said, "to support a strong labor market as we make further progress toward price stability."

By cutting rates, he said, "there is good reason to think that the economy will get back to 2 percent inflation while maintaining a strong labor market."

A rate cut in mid-September, coming less than two months before the presidential election, could bring some unwelcome political heat on the Fed, which seeks to avoid becoming entangled in election-year politics.

Former President Donald Trump has argued that the Fed shouldn't cut rates so close to an election. But Powell has repeatedly underscored that the central bank would make its rate decisions based purely on economic data, without regard to the political calendar.

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