US Fed Chair Jackson Hole Highlights: Time has come to cut rates, says Powell

US Fed Chair Jackson Hole 2024 Live: Stocks rally as Powell ‘locks in’ a September cut

Stocks rallied across the board and bond yields tumbled, with Jerome Powell giving its clearest signal yet that the Federal Reserve will begin cutting interest rates in September.

While Wall Street had already priced in the start of policy easing next month, Powell’s comments that the “time has come” validated those views. Now there are plenty of other aspects in his Jackson Hole speech that shouldn’t be overlooked. For one, the Fed chief acknowledged recent progress on inflation. Then there’s the fact the he sees the economy growing at a “solid pace” — which provides reassurance after the recent growth jitters.

US Fed Chair Jackson Hole 2024 Live: Post-Pandemic economic stability in sight as inflation cools, labour market stabilizes

Four and a half years after the onset of the COVID-19 pandemic, the most severe economic disruptions appear to be easing. Inflation has seen a notable decrease, and the labor market has stabilized, moving away from the overheated conditions seen before the pandemic. Supply constraints have also returned to normal, marking a shift in the economic landscape. The focus now is on restoring price stability while maintaining a robust labor market, avoiding the sharp unemployment spikes that characterized past disinflation efforts when inflation expectations were less well anchored. Though the mission isn’t fully accomplished, significant progress has been made.

US Fed Chair Jackson Hole 2024 Live: S&P 500 up 1% as ‘Powell Pivot’ sinks bond yields

The S&P 500 rose about one per cent. Treasury 10-year yields declined five basis points to 3.81 per cent. The dollar fell 0.8 per cent. Swap traders held steady in their pricing for the total rate cuts they foresee through the end of 2024, at about 98 basis points. Odds also remained steady for a quarter-point cut in September.

All major groups in the S&P 500 advanced, with the gauge approaching its all-time highs. Treasuries climbed across the US curve, with the two-year yield breaking below four per cent. The dollar retreated against all of its major peers.

US Fed Chair Jackson Hole 2024 Live: Pound rises to strongest in over two years against the US dollar

Sterling climbed to the strongest level in over two years, adding to a world-beating rally fueled by bets the Bank of England will ease monetary policy less than the Federal Reserve. The pound on Friday rose as much as 0.8 per cent to $1.3192, touching the highest since March 2022. 

The latest gains came after Federal Reserve Chair Jerome Powell said the time has come for the US central bank to cut its key rate, bolstering the view that the outlook for the two economies would continue to diverge.

US Fed Chair Jackson Hole 2024 Live: Snapshot-Powell’s speech at Jackson Hole 

After holding its key lending rate at a two-decade high for more than a year, Powell’s remarks suggest the US central bank is now all but certain to start cutting rates in September, as inflation continues to ease.

The Fed has a dual mandate from Congress to tackle both inflation and unemployment, and has been signaling in recent months that the risks to the two sides of its mandate are now coming into better balance.

US Fed Chair Jackson Hole 2024 Live: How to prepare for the Fed’s forthcoming interest rate cuts

Based on Powell’s remarks and recent economic data, the central bank is expected to cut its key rate by a quarter-point when it meets next month and to carry out additional rate cuts in the coming months. Here’s what consumers should know:

What would the Fed’s rate cuts mean for savers?

According to Greg McBride, chief credit analyst for Bankrate, savers should lock in attractive yields right now, before the expected rate cuts begin.

“For those who might be looking at Certificates of Deposit or bonds — you want to jump on that now,” he said. “There is not a benefit to waiting because interest rates are going to be moving lower.”

McBride stressed that anyone closer to retirement has a good opportunity to lock in CDs at the current relatively high rates.

“If you do so, you’ll provide yourself a predictable flow of interest income at rates that should outpace inflation by a pretty healthy margin,” said McBride.

US Fed Chair Jackson Hole 2024 Live: Sterling climbs to highest since March 2022 against dollar

Sterling climbed to a more than two-year high on the dollar on Friday, on recent signs of strength in the UK economy and dovish comments from Federal Reserve Chair Jerome Powell that sent the dollar sliding against several global currencies.

Britain’s pound jumped 0.7 per cent to $1.3185, touching its highest since late March 2022. It surpassed a previous 13-month high of $1.3144.

The dollar index, that tracks the greenback’s performance against six major currencies, dropped 0.5 per cent after Powell said “the time has come” to adjust policy and promised to do all he can to avoid further weakening of labour markets.

US Fed Chair Jackson Hole 2024 Live: Powell green lights September rate cut

Powell said the Fed’s restrictive monetary policy had “helped restore balance between aggregate supply and demand, easing inflationary pressures and ensuring that inflation expectations remained well anchored.”

The Fed’s benchmark lending rate currently sits at a 23-year high of between 5.25 and 5.50 per cent, cooling demand in the world’s largest economy ahead of November’s presidential elections, in which inflation and the cost of living have taken a central role.

US Fed Chair Jackson Hole 2024 Live: Downside risks to labor market has gone down, says Powell

While Powell said the jump of nearly a percentage point in the unemployment rate over the past year was due largely to rising labor supply and slowed hiring, not increased layoffs, he also was emphatic that the Fed wanted to prevent any further erosion – his prior talk of labor market “pain” as necessary to control inflation now a thing of the past. 

The current unemployment rate of 4.3 per cent is roughly at the level Fed officials feel is consistent with stable inflation over the longer run. “We do not seek or welcome further cooling in labor market conditions,” Powell said.

US Fed Chair Jackson Hole 2024 Live: Upside risks to inflation have gone down, says Powell

The Fed chief also acknowledged recent progress on inflation, which has resumed moderating in recent months after stalling earlier in the year: “My confidence has grown that inflation is on a sustainable path back to two per cent,” he said, referring to the central bank’s inflation target.

US Fed Chair Jackson Hole 2024 Live: Wall Street rises after Fed chief signals rate cuts are coming

US stocks are climbing closer to their records after the head of the Federal Reserve finally said out loud what Wall Street has been expecting for a while: Cuts to interest rates are coming soon to help the economy. The S&P 500 was one per cent higher Friday after Fed Chair Jerome Powell said the time has come to lower its main interest rate from a two-decade high.

 The index is back within one per cent of its all-time high set last month. The Dow Jones Industrial Average was up 305 points, and the Nasdaq composite was 1.4 per cent higher. Treasury yields also eased in the bond market.

US Fed Chair Jackson Hole 2024 Live: Soft landing for economy is in play, says Powell

Federal Reserve Chair Jerome Powell is confident that the central bank will successfully thread the needle and deliver a so-called soft landing for the US economy. It would be a rare feat, last seen in the 1990s.

Getting there will require easing off from today’s high interest rates, Powell said, setting up a likely September start to rate cuts.

US Fed Chair Jackson Hole 2024 Live: Powell says timing, pace of rate cuts will depend on incoming data

‘’The timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

His reference to multiple rate cuts was the only hint that a series of reductions is likely, as economists have forecast. Powell emphasized that inflation after the worst price spike in four decades inflicted pain on millions of households, appears largely under control:

“My confidence has grown,” he said, “that inflation is on a sustainable path back to  two per cent.”

According to the Fed’s preferred measure, inflation fell to 2.5 per cent last month, far below its peak of 7.1 per cent two years ago and only slightly above the central bank’s two per cent target level.

US Fed Chair Jackson Hole 2024 Live: Powell begins speech at Jackson Hole

Federal Reserve chair Jerome Powell said Friday that the “time has come” for the United States to start cutting interest rates, adding that his “confidence has grown” that the battle against inflation is on track.

“The time has come for policy to adjust,” he said in a keynote speech at the Jackson Hole Economic Symposium in the US state of Wyoming, according to prepared remarks, adding: “The direction of travel is clear.”

US Fed Chair Jackson Hole 2024 Live: Treasury yields hold steady ahead of Powell speech

Treasury yields were holding relatively steady in the bond market. They’ve already pulled back sharply since April on expectations the Federal Reserve is about to start cutting its main interest rate for the first time since 2020. Such a move would ease the brakes off the economy after the Fed earlier jacked its main rate to a two-decade high.

Traders see a high likelihood the Fed will cut its main interest rate by 1 percentage point by the end of the year, according to data from CME Group. That would require the Fed to go beyond the traditional move of a quarter of a percentage point at least once in its three meetings remaining for the year.

If their predictions are wrong, which has also been a frequent occurrence, that could mean Treasury yields have already pulled back too much since they began declining in the spring. That in turn could pressure all kinds of investments. On Thursday, for example, the S&P 500 fell to its worst loss in more than two weeks after Treasury yields climbed.

US Fed Chair Jackson Hole 2024 Live: Wall Street opens higher ahead of Powell’s speech at Jackson Hole

Wall Street’s main indexes opened higher on Friday as investors looked to a speech from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium for clues on the pace of rate cuts in the world’s biggest economy.

The Dow Jones Industrial Average rose 166.3 points, or 0.41 per cent, at the open to 40,879.12. The S&P 500 rose 31.8 points, or 0.57 per cent, at the open to 5,602.49​, while the Nasdaq Composite rose 153.4 points, or 0.87 per cent, to 17,772.727 at the opening bell.

US Fed Chair Jackson Hole 2024 Live: D-Street experts ahead of Powell speech

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd:

“Markets ended flat in a listless trading as investors resorted to caution ahead of the US Fed chair’s Jackson Hole meeting outcome. Investors are hoping that the US Fed could give some sense on when will the immediate rate cut will happen on the back of moderating inflation and subdued job data.”

Shrikant Chouhan, Head Equity Research, Kotak Securities:

In Global news, in US, US fed released its minutes on Wednesday and said that the “vast majority” of policymakers felt that, considering the data came according to expectations, the market can expect a September rate cut. All eyes are now on Fed Chair Jerome Powell and whether he would deliver some clarity on the upcoming policy action by the US central bank at his Jackson Hole speech today evening. 

US Fed Chair Jackson Hole 2024 Live: US unemployment data ahead of Fed meeting

Recent data including weekly jobless claims and payrolls revisions signaled the US economy was slowing, albeit gradually, assuaging fears over a sharp downturn. That has helped Wall Street’s three main indexes recover from a plunge earlier this month triggered by a dour July employment report and yen carry trade. 

The S&P 500 is now about 1.8 per cent away from a record high touched in mid-July, after falling as much as 9.7 per cent from that level. Later in the day, data from the US Commerce Department’s Census Bureau is expected to show new home sales steadied in July after hitting a seven-month low in June.

US Fed Chair Jackson Hole 2024 Live: Wall Street set for higher open as spotlight turns to Powell

Wall Street’s main indexes were set to open higher on Friday ahead of a speech from Federal Reserve Chair Jerome Powell that investors expect will offer hints on the pace of rate cuts in the world’s biggest economy.

While minutes from the Fed’s July meeting this week showed a number of policymakers were ready to consider rate cuts come September, Powell’s speech could offer insights on the pace of easing and how the central bank will respond as the economy evolves.

Powell is scheduled to speak at 10 a.m. ET at the annual global gathering of central bank officials at the Jackson Hole Economic Symposium in Wyoming.

US Fed Chair Jackson Hole 2024 Live: Nifty 50, Sensex end flat; Powell’s Jackson Hole speech in focus

Indian stock market benchmarks, the Nifty 50 and the Sensex, ended flat on Friday, August 23, ahead of the US Fed Chair Jerome Powell’s speech at the Jackson Hole conference expected later today.

The Sensex closed 33 points, or 0.04 per cent, up at 81,086.21, while the Nifty 50 ended 12 points, or 0.05 per cent, up at 24,823.15.

Indian stock market ended flat even as major Asian and European peers were largely positive and the dollar hovered near one-year lows. Investors are now focused on the Fed Chair’s speech, seeking clues on upcoming US rate cuts.

Commenting on the market performance, Vinod Nair, Head of Research, Geojit Financial Services said, “Ahead of the FED chair Powell’s speech, the Indian indices oscillated around the flat trajectory and mixed global market sentiments further catalysed this scenario.”

‘’Meanwhile, investors are exercising caution and awaiting Powell’s signals for more insights on the interest rate path. Most of the sectoral indices remained in red; in contrast, the auto sector excelled as the industry is preparing for festive season demand with multiple launches,” added Nair.

US Fed Chair Jackson Hole 2024 Live: Powell to focus on jobs data, rate cut trajectory

Wall Street experts agree that the US Fed is getting closer to conquering high inflation, which began three years ago as the economy rebounded from the pandemic recession, putting millions of households under financial constraint. Few economists think Powell or any other Fed official is prepared to declare “mission accomplished.”

Economists say the Fed is now more focused on labour versus inflation as their policy is calibrated for inflation that is much higher than this. Still, how fast the Fed cuts rates are announced in the coming months will depend on the US economic data. A rate cut by the Fed would significantly impact the global financial markets, including India.

US Fed Chair Jackson Hole 2024 Live: How will Powell’s rate cuts impact Indian market?

Madhavi Arora, Lead Economist at Emkay Global Financial Services:

Arora observed that the market expectation is that Fed Chair Powell will pave the way for a September rate cut while speaking at Jackson Hole on Friday.

However, Powell had emphasised that the Fed will be ‘data dependent, not data-point dependent’ in the July FOMC press conference, and recent economic data has clashed – the unemployment rate rose to 4.3 per cent in July, while retail sales and jobless claims data paint a much healthier picture.

In this context, Arora added that Powell will likely hedge his bets and reiterate that the Fed remains watchful, especially regarding how the labour market evolves. Arora said markets are currently pricing in a 78 per cent probability of a 25bps rate cut in September, compared to a 53 per cent probability of a 50bps cut just a week ago.

Given the current dynamics, a 25bps cut looks more appropriate. Indian markets have already heavily factored in rate cuts, with the rate-sensitive IT sector seeing significant gains over the past week. Nevertheless, a September rate cut will be sentimentally favourable, and domestically, the RBI may follow suit before the end of 2024, said Arora.

US Fed Chair Jackson Hole 2024 Live: Where is Jackson Hole?

Jackson Hole is located northwest of the US State of Wyoming, near the border with Idaho in Teton County. It refers to the valley between the Teton and Gros Ventre mountain ranges. Grand Teton National Park primarily occupies the northern part of Jackson Hole.

Kansas City Federal Reserve’s annual symposium is held at Jackson Lake Lodge in Grand Teton National Park. It is an annual conference or gathering of global central bankers and economists in the Wyoming mountains.

US Fed Chair Jackson Hole 2024 Live: What to expect from Powell’s speech at Jackson Hole?

Powell is widely expected to hint at a potential rate cut in September while addressing policymakers at Jackson Hole. Given the recent economic indicators, experts say there’s a strong possibility that Powell might signal a 25 bps or even a 50 bps rate cut next month.

Some Fed officials said a half-point Fed rate cut in September would become more likely if there were signs of a further slowdown in hiring. The next jobs report will be issued on September 6. In the last policy decision, Powell said if US inflation continues to fall, “a reduction in our policy rate could be on the table” when the Fed next meets in September.

US Fed Chair Jackson Hole 2024 Live: Where to watch Jerome Powell’s speech today?

Viewers can catch live updates of Fed chair Powell’s speech at Jackson Hole on livemint.com; Alternatively, one can visit the US Federal Reserve’s official website -https://www.federalreserve.gov/; and the official account of the US Fed on the microblogging platform ‘X’–https://x.com/federalreserve to watch Powell’s speech on Friday, August 23 at 7:30 pm IST or 10:00 am EST.

US Fed Chair Jackson Hole 2024 Live: Jerome Powell to deliver speech at 10:00 am IST on Friday, August 23

US Fed chair Powell will address a group of central bankers at the event hosted by the Fed’s Kansas City branch at 10 a.m. Eastern Daylight Time (EST), which means 7:30 pm Indian Standard Time (IST) on Friday, August 23.