To The Moon

1. Will a September rate cut support markets?

Equities: A 25–50 bps rate cut in September would likely be viewed as supportive, particularly for growth and tech stocks, since lower yields reduce discount rates on future cash flows. However, the market has already priced in substantial easing. If Powell only hints at a gradual pace, equity upside could be muted.

Bonds: A cut would support Treasuries, especially at the short end of the curve, but investors may watch for how the Fed frames inflation risks.

Dollar & Commodities: A dovish Fed stance could weaken the USD, lending support to gold and emerging market assets.

Caution: If the cut is interpreted as the Fed responding to recession risks rather than disinflation progress, markets could turn risk-off. The narrative (growth support vs growth concern) will matter as much as the cut itself.

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2. What to focus on at Jackson Hole?

Key areas investors should monitor in Powell’s remarks:

1. Policy Timing & Magnitude

Does Powell explicitly acknowledge September as “live”?

Any openness to a 50 bps cut vs a more cautious 25 bps?

2. Inflation Assessment

Whether the Fed believes recent downside surprises in inflation are durable.

Any discussion of core services inflation or wage growth as lingering risks.

3. Growth Outlook

Does Powell frame easing as an insurance cut to sustain growth, or as a necessary response to weakening demand?

Any reference to rising risks of a “hard landing.”

4. Long-term Neutral Rate

Signals about whether the Fed’s view of the neutral rate has shifted higher, which would affect the trajectory of future cuts.

5. Global Coordination

With the ECB and other central banks also debating easing, Powell may allude to the broader global policy stance.

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✅ Bottom line:

A September cut will likely continue to support markets if Powell frames it as a proactive step to lock in disinflation and sustain growth. If instead he stresses downside risks to the economy, the positive impact could fade quickly. At Jackson Hole, tone and framing will matter more than the specific number of cuts.