Powell to cut rates, market to soar

[stinkynuts]

Friday will be an important date for markets.

This is when Powell is expected to finally cut rates, serving as the catalyst for a new bull run.

His announcments at the Jackson Hole meetings have previously moved markets signficantly. Back in 2022, he announced that the Fed would start raising rates, and stocks began a serious drawdown. When he announced that they were going to start cutting rates the last meeting, stocks began a bull run.

Might be a good time for risk assets such as crypto, tech.


Some, however, say that markets could fall signicantly.

Markets on edge as Evercore warns - Powell’s Jackson Hole speech could spark a shocking 15% plunge

Jerome Powell will speak at Jackson Hole, and Evercore warns his Fed rate cut signals could affect markets. Investors hoped for bigger cuts, so stocks may drop 7–15%. Mixed inflation and jobs data and high stock prices increase risks. Experts suggest safe investing in tech, AI, and healthcare...

economictimes.indiatimes.com

 

[HungSowel]

There is no fish in that pond bro, the market has already priced it in.

The market is priced well beyond perfection; it is priced for AGI.

 

[silentkisser]

Friday will be an important date for markets.

This is when Powell is expected to finally cut rates, serving as the catalyst for a new bull run.

His announcments at the Jackson Hole meetings have previously moved markets signficantly. Back in 2022, he announced that the Fed would start raising rates, and stocks began a serious drawdown. When he announced that they were going to start cutting rates the last meeting, stocks began a bull run.

Might be a good time for risk assets such as crypto, tech.


Some, however, say that markets could fall signicantly.

Markets on edge as Evercore warns - Powell’s Jackson Hole speech could spark a shocking 15% plunge

Jerome Powell will speak at Jackson Hole, and Evercore warns his Fed rate cut signals could affect markets. Investors hoped for bigger cuts, so stocks may drop 7–15%. Mixed inflation and jobs data and high stock prices increase risks. Experts suggest safe investing in tech, AI, and healthcare...

economictimes.indiatimes.com

Couple of things. First, the Fed is not going to cut rates this Friday. Powell is speaking at an event, and while his comments can move the market, I suspect he'll be playing things close to his chest. The next FOMC/rate decision meeting in mid-September.

The second thing is, there are a lot of things going on right now that likely will make a rate cut difficult. Inflation in July hit nearly 3%, which is hotter than the Fed likes. They want a 2% rate, and they use interest rates to keep it within that range. While Trump, who obviously does not understand economics, wants rate cuts, the FOMC will see what inflation did in August, and make a decision on that. And, because of Trump's tariffs and immigration moves, the cost of food and imported goods are going to be even higher than July.

So, while I will not be so bold as to say there is zero chance Powell and the FOMC cut rates, I will say that the odds are not that good.

Now, breaking news this morning, Trump is trying to get a Fed governor to quit over allegations (from a Trump crony) that she committed mortgage fraud.

https://www.cnn.com/2025/08/20/economy/trump-pushes-for-fed-governor-lisa-cook-resignation

I think it is important that we all recognize the fact that Trump wants a Fed that will listen to his whims. Cut rates when he wants them, despite the economic harm that would do. If he were to force Powell out, or when his term is over and he appoints someone who is not qualified...Global markets will likely punish the US in some fashion. Maybe they sell off treasury bills, or refuse to buy new ones. Markets and trading is based on trust. If traders feel like the Fed is not following its mandate and going against sound economic principles, it will break trust with the US government, and throw the global economy into a chaos. The USD will plunge in value. Short term lending would probably get a bit cheaper, but long-term lending would be much more expensive. And, of course, equity and bond markets would be extremely volatile.

 

[oil&gas]

There is no fish in that pond bro, the market has already priced it in.

The market is priced well beyond perfection; it is priced for AGI.

The market has priced in escalating inflation IMO.

If all things are becoming more expensive there is no
reason why stocks couldn't be one of them.

 

[stinkynuts]

Historically, rate cuts have always been good for stocks. It seems this time will be similar. This article was from a year ago, before the very first rate cuts. Same concept though.

https://www.northerntrust.com/japan/insights-research/2024/point-of-view/how-stocks-historically-performed-during-fed-rate-cut-cycles

 

[Ceiling Cat]

Cutting rates at the wrong moment could have disastrous consequences, and the timing of such a decision is crucial. Is Powell's move to lower rates driven by a need to placate the Orange Clown, or is merely playing along with Trump till they ship him off in a big orange crate? Is this truly the right time for a rate cut, and is there enough justification for it? To make such a decision without solid reasoning risks undermining opportunities for economic recovery, is this Trump's version of " Let them eat cake" at the price of robbing the future. In a bid to appease MAGA and gain support from the public, he is pressuring Powell to do what he does not want to do.

Trump Says He Should Appoint Himself as Fed Chair

President Donald Trump criticizes Federal Reserve Chair Jerome Powell while talking with reporters on the White House lawn ahead of a flag raising. He said h...

www.youtube.com

 

[faveone]

Cutting rates at the wrong moment could have disastrous consequences, and the timing of such a decision is crucial. Is Powell's move to lower rates driven by a need to placate the Orange Clown, or is merely playing along with Trump till they ship him off in a big orange crate? Is this truly the right time for a rate cut, and is there enough justification for it? To make such a decision without solid reasoning risks undermining opportunities for economic recovery, is this Trump's version of " Let them eat cake" at the price of robbing the future. In a bid to appease MAGA and gain support from the public, he is pressuring Powell to do what he does not want to do.

Cutting rates = making borrowing cheaper = more credit available = Fed Reserve printing more $$ = INFLATION

https://www.facebook.com/video.php?v=1363818268065717

 

[silentkisser]

Cutting rates at the wrong moment could have disastrous consequences, and the timing of such a decision is crucial. Is Powell's move to lower rates driven by a need to placate the Orange Clown, or is merely playing along with Trump till they ship him off in a big orange crate? Is this truly the right time for a rate cut, and is there enough justification for it? To make such a decision without solid reasoning risks undermining opportunities for economic recovery, is this Trump's version of " Let them eat cake" at the price of robbing the future. In a bid to appease MAGA and gain support from the public, he is pressuring Powell to do what he does not want to do.

Trump Says He Should Appoint Himself as Fed Chair

President Donald Trump criticizes Federal Reserve Chair Jerome Powell while talking with reporters on the White House lawn ahead of a flag raising. He said h...

www.youtube.com

This is the quandary Powell finds himself in. The US economy is seeing inflation coming in too high, well above 2% and likely to get worse as retailers and manufacturers pass on the cost of the tariffs to the general public. The other issue is this will cool economic growth. So, does Powell leave rates "as is' to cool inflation (or, god forbid for Trump, raise them), or does he cut rates in the hopes to spur economic growth and be damned with inflation?

Now, the court ruling yesterday about the Trump tariffs being illegal adds more confusion. While the court said it was not allowed, they allowed him to continue with them. WTF??? I mean, I don't expect Trump to all of a sudden pull the plug on tariffs....But, surely he'll be forced to stop...Which could help with most of the tariffs and help cool inflation...

Powell is basically fucked. Damned if he does, damned if he doesn't. I think in many ways, he will have a tougher job than Bernanke during the fiscal crisis 18 years ago, mostly because the President thinks he understand economics better than anyone...

 

[Ceiling Cat]

The tariffs will go away when Trump goes away.

Trump's tariffs were driven largely by political motivations, with the intention of protecting American jobs and addressing trade imbalances, especially with China. However, these tariffs have failed to deliver the promised economic benefits to the U.S. and, in many ways, have backfired. Instead of bolstering American industries, they resulted in higher costs for consumers and businesses, disrupting supply chains and raising prices on everyday goods. The agricultural sector, in particular, suffered from retaliatory tariffs, while manufacturers faced increased production costs. Beyond the U.S., the tariffs created economic chaos on a global scale, causing uncertainty in international markets and slowing down global trade. Instead of fostering economic growth, Trump's tariffs contributed to a more fractured and volatile global economy, showing that protectionist policies often do more harm than good.


When Trump eventually is carted off in an orange crate, it’s highly unlikely that his tariffs will remain. Both within the Democratic Party and even among certain factions of the Republican Party, there will be an overwhelming desire to undo the damage caused by these policies. Trump's successor will face immense pressure to dismantle the tariffs, and maintaining them would be a near-impossible task, given the economic strain they've caused. The political landscape will shift, as both parties recognize the need to stabilize trade relationships and ease the economic burden on American consumers and businesses. Metaphorically, it will be as if the skies open up after a tragic and horrible storm, with the global economy finally finding a path to recovery. The removal of tariffs would represent a fresh start, clearing away the dark clouds of uncertainty and paving the way for more cooperative and productive international trade.

 

[faveone]

The tariffs will go away when Trump goes away.

Trump's tariffs were driven largely by political motivations, with the intention of protecting American jobs and addressing trade imbalances, especially with China. However, these tariffs have failed to deliver the promised economic benefits to the U.S. and, in many ways, have backfired. Instead of bolstering American industries, they resulted in higher costs for consumers and businesses, disrupting supply chains and raising prices on everyday goods. The agricultural sector, in particular, suffered from retaliatory tariffs, while manufacturers faced increased production costs. Beyond the U.S., the tariffs created economic chaos on a global scale, causing uncertainty in international markets and slowing down global trade. Instead of fostering economic growth, Trump's tariffs contributed to a more fractured and volatile global economy, showing that protectionist policies often do more harm than good.


When Trump eventually is carted off in an orange crate, it’s highly unlikely that his tariffs will remain. Both within the Democratic Party and even among certain factions of the Republican Party, there will be an overwhelming desire to undo the damage caused by these policies. Trump's successor will face immense pressure to dismantle the tariffs, and maintaining them would be a near-impossible task, given the economic strain they've caused. The political landscape will shift, as both parties recognize the need to stabilize trade relationships and ease the economic burden on American consumers and businesses. Metaphorically, it will be as if the skies open up after a tragic and horrible storm, with the global economy finally finding a path to recovery. The removal of tariffs would represent a fresh start, clearing away the dark clouds of uncertainty and paving the way for more cooperative and productive international trade.

I see TDS is still rampant, even here in Canada

 

[Indiana]

Didn’t quite happen.
Me thinks it’s been built in by now.

Regardless, I’m at the stage I’ve had enough growth, just looking for invome.
Made some transfers into TFSA today and doubled my monthly dividend income

 

[stinkynuts]

The last quarter is usually very strong. I think markets were a bit skittish because Powell didn't committ to more rate cuts in 2026.

However, the year should still end strong. Overnight trading seems to show a very strong market tomorrow.