Stocks Rally on September Rate Cut — Jackson Hole Speech Changes Everything

"they're going to cut interest rates in September."

"market expectation, they're going to cut in September."

"the odds of an interest rate cut in September increase from 76% to 89.2%."

"The odds are heavily in favor of a cut. And I'm going to tell you why."

"it looks like the decision has already been made"

"The Federal Reserve would cut interest rates at their next meeting on September 17th."

"this weakening labor market gives the Federal Reserve reason to cut interest rates in September."

"the July CPI inflation reports that was released in August did not have any kind of nasty surprises. So CPI headline inflation came in at 2.7%. So this was at the same level that it was at the prior month. So therefore, it didn't come in worse than expected. And this makes people believe that inflation is not shooting up. Therefore, the Federal Reserve can focus on assisting the labor markets with an interest rate cut."

"CPI core inflation did move up from 2.9% in the previous month to 3.1%. And the Fed prefers to use core inflation, but now we're at 3.1%. And that's far from the 2.0% target. And not only that, it's also going in the wrong direction. So if you have inflation accelerating, then of course the Federal Reserve is not going to want to cut interest rates because that'll be inflationary."

"the PPI report showed rapidly rising prices for businesses because of the tariffs. So this is important because if businesses are seeing higher prices for goods and services, then it's expected that they're going to pass on these higher prices to consumers. So in other words, it's just a matter of time before we see a surge of inflation in consumer prices. So the expectation was that the PPI would rise by 0.2% in July, but the PPI rose by 0.9% which is and that's like horrifyingly bad."

"J Paul Powell, chair of the Federal Reserve, clearly said that the main data points in the jobs reports that he's going to be looking at is the unemployment rates."

"the unemployment rates, then it only ticked up from 4.1% in June to 4.2% in July, which of course would not warrant an interest rate cut to save the labor market because the labor market doesn't need any saving according to the unemployment rate, that data point."

"With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance. So that means that their base case is leaning towards holding interest rates steady to cutting interest rates."

"So this means an easier monetary policy. So more inflation which includes asset inflation which is why the stock market, gold, silver, and Bitcoin are pushing higher."

"A reasonable base case is that the effects will be relatively short-lived, a one-time shift in the price level."

"downside risks to employment are rising. So, that means he's leaning towards a rate cut to prevent further deterioration in the labor market."

"downside risks to employment are rising."