Powell Signals September Rate Cut at Jackson Hole, Markets Rally
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Fed Chair Jerome Powell indicated a September rate cut is likely, pushing odds near 90% as markets surged on dovish signals.
By Matt BrienenStocks and Mortgage Bonds moved sharply higher after Fed Chair Jerome Powell’s speech at Jackson Hole, where he signaled readiness to cut rates at the upcoming September 17 meeting. Powell pointed to slower job growth, major labor market revisions, and rising downside risks to employment as reasons for a policy shift.
He dismissed concerns that tariffs would drive lasting inflation, calling the impact temporary and limited. Growth, meanwhile, has slowed to 1.2% over the first half of the year, adding to the case for easing. Powell stated that with policy already in restrictive territory, the shifting balance of risks justifies an adjustment.
Markets took this as a clear green light, with odds of a 25bp cut surging to nearly 90%. Investors will now focus on upcoming data, including the PCE inflation report, the September 5 Jobs Report, and benchmark revisions on September 9. While strong labor numbers could delay action, Powell’s tone confirmed the Fed is leaning toward easing.