In his Jackson Hole speech in August, Federal Reserve Chair Jerome Powell gave his clearest direction yet on where he expected the central bank to take interest rates. Powell suggested that “the time has come for policy to adjust,” although he also remained steadfast that “the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
Now we know exactly how the Fed feels about the balance of risks in the economy. The Fed’s announcement on September 18 to cut interest rates by a 0.5 percentage point demonstrated only a passing concern for future inflation. Stock market participants everywhere can now breathe a sigh of relief as the market is likely to perform well as rates continue to fall.
