Jerome Powell's Caution on FOMC Rate Cuts Impacting Wall Street
Jerome Powell's Insights on Federal Reserve Rate Cuts
Traders have been recalibrating their expectations for an interest-rate cut in December following Jerome Powell's remarks. The US Federal Reserve Chair emphasized economic resilience, suggesting a careful approach to any potential easing of rates.
Key Takeaways from Powell's Address
- Economic signals do not indicate urgency in reducing rates.
- Traders have lowered chances of a December cut to below 60%.
- Future rate paths may see adjustments as market conditions evolve.
Market Reactions
As Powell spoke, yields on two-year Treasuries rose, indicating market reactions to his cautious tone. While an interest rate reduction still favors December, projections for 2025 are becoming increasingly uncertain.
Economists speculate about a slowdown in rate cuts sooner than expected, with Powell's statements hinting at more gradual easing.
Powell's remarks suggest that the Fed's approach to rate cuts may leave interest rates higher for a longer period, impacting overall market strategies.
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