Federal Reserve Chair Jerome Powell’s speech at Jackson Hole suggests a likely interest rate cut in September. Markets predict a 90% chance of a quarter-point cut. Stocks rose 1.7%, bond yields fell, and futures traders increased odds of a rate cut to 90%. Powell highlighted weakening job market and slowing growth as key factors.

Economists say Powell’s speech signaled readiness to cut rates due to inflation pressures from tariffs. Labor market weakness and slowing growth were key concerns. Odds of a September rate cut are now at 90%, up from 73%. Powell’s remarks led to market gains and falling bond yields.

Experts analyze Powell’s speech, noting factors supporting rate cuts like inflation nearing target and labor market cooling. GDP growth has slowed, and tariffs impact prices. Labor market balance has shifted, increasing risks of unemployment. Uncertainty remains about long-run fed rates amid structural shifts in the economy.

The Fed’s return to flexible inflation targeting suggests a potential rate cut in September. Powell’s signal was stronger than expected, but not guaranteed. The shift in tone from the July minutes indicates a change in risk assessment. Weak employment data and inflation threats from tariffs influenced the Fed’s outlook.

Read more at Morningstar: Why Powell’s Jackson Hole Speech Suggests a US Interest Rate Cut is On the Way