The chairman of the Federal Reserve, Jerome Powell, has warned about "uncertainties" facing the U.S. economy. He says they are boosting the chances of an interest rate cut at the end of July.

Powell issued the warning as he testified to lawmakers in Washington, D.C.

"At our June meeting, we indicated that in light of increased uncertainties about the economic outlook and muted inflation pressures we would closely monitor the implications of incoming information for the economic outlook and would act as appropriate to sustain the expansion. 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. economic outlook," said Powell.

The S&P 500 broke through the 3,000 mark for the first time as Fed chairman Powell signaled that tactical shift.

The uncertainties he described mean business investment has flattened. And with weak inflation on top of that, Wall Street now believes a rate cut is a certainty.

Breaking with tradition, U.S. President Donald Trump has been piling on the pressure for the Fed to do exactly that. The president recently said, “If we had a Fed that would lower interest rates, we would be like a rocket ship.

Many economists believe the U.S. central bank and its chairman are completely immune to outside pressure.

"I know that people parse his words and try to say, well they are or they aren't going to cut rates, or they're more likely or less likely, but the rate thing is really just a distraction from what's going on. The truth is: if they believe the economy is too weak, then they have to do something. If they believe inflation is too much of a risk, then they have to do something. It really just comes down to that,” said Norbert Michel from the Heritage Foundation in the U.S. capital.

President Trump has mentioned the possibility of demoting Jerome Powell. The Fed chairman told Congress that he wouldn't quit if President Trump asked him to, adding that the law gives him a four- year term and that he intends to serve it. 

However, economic headwinds could push the U.S. central bank to give President Trump exactly what he wants.