Concerns about trade policy and a weak global economy “continue to weigh on the US economic outlook” and the Federal Reserve stands ready to “act as appropriate” to sustain a decade-long expansion, Fed Chairman Jerome Powell said Wednesday in remarks that could bolster expectations of an interest rate cut later this month.

In prepared remarks to a congressional committee, Powell contrasted the Fed’s “baseline outlook” of continued US growth against a considerable set of risks – including persistently weak inflation, slower growth in other major economies, and a downturn in business investment driven by uncertainty over just how long the Trump administration’s trade war with China and other countries will last and how intense it will become.

Fed officials at their June policy meeting signaled those concerns might warrant lower rates, and “since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US outlook,” Powell said.

“Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture reported heightened concerns over trade developments,” Powell said, noting that business investment, an important component of economic growth, “seems to have slowed notably” in recent months.

Overall growth has also “moderated,” the Fed chief said, while “there is a risk that weak inflation will be even more persistent than we currently anticipate,” and not prove as transitory as Fed officials have often insisted.

“Powell is setting it up, certainly for a July rate cut,” said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago. “To me, it all depends on where you look in the economy. But over the last decade, the Federal Reserve has been banging the inflation beehive with a baseball bat and the bees haven’t come out, so they figure keep trying this until something happens.”

US stock index futures gained, turning positive for the day after Powell’s remarks were released, while the US dollar fell against a basket of other currencies. Government bond yields dipped, with two-year Treasuries falling below 1.87%, from around 1.93% earlier Wednesday morning. Meanwhile, interest rate futures appeared to price in greater odds of an aggressive, 50-basis-point rate cut this month.

Powell will present his remarks and take questions from members of the US House of Representatives Financial Services Committee beginning at 10 a.m. EDT, and will testify again Thursday before the Senate Banking Committee.

His appearances come at a particularly sensitive time for both the Fed and Powell personally, with President Donald Trump lashing out at his handpicked Fed chief for not cutting interest rates that, in Trump’s view, are needlessly slowing the economy.

At the same time, in the view of Fed officials, Trump’s own policies — including higher tariffs and a somewhat unpredictable approach — have increased economic risks and led them to consider the very rate reductions Trump has demanded.

The Fed has kept its current benchmark overnight interest rate in a range between 2.25% and 2.50% since December.

Following the hearing Wednesday, the Fed is due to release the minutes from its last policy meeting, which should show the extent to which the thinking at the central bank shifted in the days following Trump’s Mexico tariff threat, and how the discussion was shaped by other concerns including weak inflation.