Powell has spoken, it's time to adjust the high interest rates!

With this statement, the sentiment has surged; now everyone believes that the Fed will definitely lower the interest rates by 25 basis points in September, with a probability as high as 91.1%, basically a done deal (previously it was 74.8%).

Why lower interest rates?

1. The U.S. job market is struggling a bit, and if interest rates are not lowered, it might become harder to find a job.

2. The previously concerning impact of tariffs on inflation now seems temporary, so there’s no need to fear that lowering interest rates will cause prices to soar.

Not only is there a high probability of a rate cut in September, but the likelihood of another cut in October is also approaching 50%, and even the probability of three cuts (25 basis points each) by 2025 is at 37%.

Many people ask, "What does this mean for ordinary people?"

The stock market might rise due to "more money" (lowering interest rates means more liquidity in the market).

If you buy bonds, the yields may go down.

💰💵 Money might temporarily lose some of its value.

In summary, the Fed is about to start "injecting liquidity to save the economy"; a rate cut in September is highly unlikely to be avoided, and what follows will depend on employment and price data, which could influence the magnitude of the rate cuts.