By Wolf Richter
Powell re-confirmed at his Jackson Hole speech on Friday that rate cuts are coming but didn’t mention “September.” He said, “The time has come for policy to adjust. The direction of travel is clear…”
But “the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
Powell presented a balanced message. There was no panic. The two sides of the Fed’s dual mandate (low inflation and full employment) have come roughly into balance.
The Fed has been talking about rate cuts since its December 2023 meeting when it put three rate cuts on the table for 2024, which markets instantly turned this into six rate cuts. Now it’s August 2024, and we’re still waiting for our rate cuts. But we’re getting closer.