Reaction Roundup: Experts weigh in on Fed chair Powell's Jackson Hole comments

[FED federal reserve of USA sybol and sign.]
Bet_Noire

Wall Street on Friday notched its best day since late May, sparked by Federal Reserve interest rate cut expectations.

Fed chair Jerome Powell at the Jackson Hole Economic Policy Symposium did not fully commit to cutting rates but did note that the downside risks to the labor market were increasing and that the "baseline outlook and the shifting balance of risks may warrant [https://seekingalpha.com/news/4488346-shifting-risks-may-warrant-rate-adjustment-fed-chair-powell-says-at-jackson-hole] adjusting our policy stance."

Following a significantly weaker-than-expected July nonfarm payrolls report earlier this month, anticipation was high going into Powell's speech that the central bank chief would provide some signals about easing monetary policy.

The benchmark S&P 500 index (SP500 [https://seekingalpha.com/symbol/SP500]) on Friday advanced +1.52% for its best day [https://seekingalpha.com/news/4488329-wall-street-rallies-after-powell-speaks-at-jackson-hole] since May 27 and ended just shy of its record close. Meanwhile, the market rally helped the blue-chip Dow (DJI [https://seekingalpha.com/symbol/DJI]) finally post a new record close [https://seekingalpha.com/news/4488380-the-top-performing-dow-stocks-as-index-hits-intraday-record-high] for the first time since December.

Here are some exchange-traded funds that track the S&P and the Dow: (NYSEARCA:SPY [https://seekingalpha.com/symbol/SPY]), (NYSEARCA:VOO [https://seekingalpha.com/symbol/VOO]), (NYSEARCA:IVV [https://seekingalpha.com/symbol/IVV]), (NYSEARCA:RSP [https://seekingalpha.com/symbol/RSP]), (NYSEARCA:SSO [https://seekingalpha.com/symbol/SSO]), (NYSEARCA:UPRO [https://seekingalpha.com/symbol/UPRO]), (NYSEARCA:SH [https://seekingalpha.com/symbol/SH]), (NYSEARCA:SDS [https://seekingalpha.com/symbol/SDS]), (NYSEARCA:SPXU [https://seekingalpha.com/symbol/SPXU]), (NYSEARCA:DIA [https://seekingalpha.com/symbol/DIA]), (NYSEARCA:DDM [https://seekingalpha.com/symbol/DDM]), (NYSEARCA:UDOW [https://seekingalpha.com/symbol/UDOW]), (NYSEARCA:DOG [https://seekingalpha.com/symbol/DOG]), (NYSEARCA:DXD [https://seekingalpha.com/symbol/DXD]), and (NYSEARCA:SDOW [https://seekingalpha.com/symbol/SDOW])

See below for various reactions to Powell's speech at Jackson Hole:

JOSEPH BRUSUELAS, PRINCIPAL AND CHIEF ECONOMIST AT RSM US LLP:

"The Kansas City Fed’s Jackson Hole Monetary Policy Symposium presented Federal Reserve Chairman Jerome Powell with an occasion to give investors and policymakers the words that they wanted to hear on a possible September rate. Powell more than delivered by noting 'the baseline outlook and shifting balance of risks may warrant adjusting out policy stance' which opens the door to one or more near term rate cuts pending labor market and inflation data.

The Powell pivot towards a possible rate cut is now predicated on the August jobs report that will be published on September 5, 2025 arriving weak or somewhere below 50,000 given what appears to be a new breakeven rate that Powell pointed to in his statement."

NEIL DUTTA, HEAD OF ECONOMICS AT RENAISSANCE MACRO RESEARCH:

"This is about the September Fed meeting. If you get solid economic data, you’ll get a hawkish cut in September. If you get bad data, you’ll get a dovish cut.

That’s how to think about this. Through the lens of an insurance cut being green lit in September. Powell did not lay the ground work for a series of rate cuts.

I think two remains a reasonable baseline for this year but given my economic outlook, the market might be underestimating the number of cuts in 2026."

DARIO PERKINS, MANAGING DIRECTOR OF GLOBAL MACRO AT GLOBALDATA.TSLOMBARD:

"Surprising to see Powell offer such a clear policy signal with so much data before the next FOMC meeting (and yes, was a clear signal)."

DAVID ROSENBERG, FOUNDER AND PRESIDENT OF ROSENBERG RESEARCH & ASSOCIATES:

"With the Fed staff lowering inflation projections, muted tariff impacts, and the possibility of unemployment rising above the natural rate, we may see significant slack in the labor market extending through 2027.

Reading between the lines, this was not just a nod toward a September cut — but a signal that a sequence of rate cuts could follow."

MICHAEL FEROLI, CHIEF U.S. ECONOMIST AT JPMORGAN:

"Powell’s Jackson Hole remarks confirmed market and consensus expectations for the FOMC to cut the funds rate at its next meeting in mid-September."

FELIX-ANTOINE VEZINA-POIRIER, STRATEGIST FOR DAILY INSIGHTS AT BCA RESEARCH:

"Powell's JH speech was centered around the shifting balance of risk opening the door to a Sept cut. It all hinges on labor, as leading indicators point to a limited jump in tariffs-induced inflation thus far. Expectations remain anchored."

JOSÉ TORRES, SENIOR ECONOMIST AT INTERACTIVE BROKERS:

"Chair Powell’s acknowledgement that labor risks are skewed to the downside at this morning’s Jackson Hole speech is reigniting animal spirits in markets. The Fed Chief’s illustration of the societal pain of job losses and rising unemployment has fixed-income watchers penciling in two to three reductions by year-end while sparking investor enthusiasm amidst a near certainty of a quarter-point trim at next month’s meeting.

Indeed, participants understood those comments to mean that the FOMC is increasingly focused on employment weakness rather than price pressures at this juncture, even though Powell did allude to inflation uncertainties persisting."

NICK TIMIRAOS, THE _WALL STREET JOURNAL_'S FED WATCHER:

"Powell cautiously tees up a cut."

MORE ON THE MARKETS

* Powell At Jackson Hole: Rate Cut Likely, Or Is It? [https://seekingalpha.com/article/4816222-powell-at-jackson-hole-rate-cut-likely-or-is-it]
* Fed Rate Cuts Don't Mean Lower Bond Yields [https://seekingalpha.com/article/4816172-fed-rate-cuts-dont-mean-lower-bond-yields]
* Likely Rate Cuts Will Provide Crucial Tailwinds, Expected Mixed Inflation [https://seekingalpha.com/article/4816216-likely-rate-cuts-will-provide-crucial-tailwinds-expected-mixed-inflation]
* The Downfall Of The U.S. Dollar - Peter Schiff's Prediction [https://seekingalpha.com/article/4814921-downfall-of-us-dollar-peter-schiff-prediction]
* NYU’s Aswath Damodaran: Markets will rally until risks show up in earnings and economy [https://seekingalpha.com/news/4488496-nyu-s-aswath-damodaran-markets-will-rally-until-risks-show-up-in-earnings-and-economy]