Federal Reserve Chairman Jerome Powell has reinforced prospects for a rate cut for the first time in a decade, saying some potential factors weighing on the U.S. economy remain hanging.

Testifying before the House Financial Services Committee on Wednesday, July 10, Powell outlined threats that the world’s largest economy is facing, including a simmering trade war, disappointing factory activity, and tame inflation, according to Reuters.

In his prepared remarks for the testimony, Powell said major factors that have the potential to drag down the economy still exist since the Fed held the last policy meeting in June.

“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 U.S. outlook,” he said.

Such kinds of uncertainties suggest the need for a rate cut “in the near term,” according to the minutes from the policy meeting released shortly after Powell concluded his testimony on Capitol Hill.

Jerome Powell hints at a rate cut in his testimony before the House Financial Services Committee on July 10, 2019. (Screenshot/FT)

The minutes indicated that some policymakers in their June 18-19 meeting worried they may need to act to lift inflation to Fed’s 2% annual target and to combat a pervasive pessimism among businesses.

Powell also set a stage for a rate cut later this month by downplaying a strong job report for June.

“We don’t have any evidence for calling this a hot labor market,” Powell told lawmakers. “To call something hot we need to see some heat.”

The rate cut signals come as President Donald Trump has been criticizing the Fed and Powell for raising interest rates, rather than cutting and aiding money flows.

Speaking to reporters at the White House last week, President Trump said, “We don’t have a Fed that knows what it’s doing” and that the U.S. economy would be like a rocket ship “if we had a Fed that would lower interest rates.”

The Fed raised the federal funds rate four times in 2018 and has kept it in a range of 2.25-2.50 percent since December.