đ¨ Powell Watch: Eyes on Jerome Powell & Monetary Policy đ
All eyes are on the Federal Reserve and its chair, JeromeâŻPowell, as markets brace for his next move. After hinting at a rate cut in September due to rising labourâmarket risks, inflation still looms large on the horizon.
Key takeaways:
Powell signalled that the Fed may proceed cautiously with any policy change, emphasising that inflation still remains a serious threat despite weaker job growth.
The updated Fed policy framework suggests an end to nearâzero interest rate expectations, signalling a shift away from ultraâloose policy even as cuts are expected.
Markets are pricing in a high probability of a quarterâpoint cut, yet the big question is the path after Septemberâwill the Fed deliver more cuts or hold back?
đ Market Implications:
⢠Rateâsensitive assets surged on the hint of a cut â especially equities and bonds.
⢠A cautious Fed stance means investors need to watch incoming jobs data, inflation prints, and Powellâs exact wording during his next testimony.
⢠The balance of risks (slowing growth vs. sticky inflation) remains tilted â making policy timing critical for positioning in both stocks and bonds.
đ Bottom line:
Powell isnât committing yet â but the signal of an upcoming cut has shifted market tone. For now: stay alert, watch data, and recognise that the game is as much about how he speaks as what he does.
