Chairman Powell’s speech at Jackson Hole confirmed the market’s expectation that rates will be declining soon. The equity markets rallied, approaching their July 15th record high close – shaking off the two-week correction that shaved 8.5% off the S&P500 and 13% off the NASDAQ. The markets remain hopeful of a fifty-basis point cut in September, and have a full point reduction by the end of the year. Powell did little to dissuade market optimism, clearly shifting the focus of data dependence from inflation statistics to the labor markets. We highlight the key phrases in his concluding paragraphs about the outlook for the economy.
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