This year feels slightly different because sentiment is already leaning toward a rate cut in September. Even though July CPI had some sticky parts, overall inflation looks manageable. With FedWatch showing over 80% odds of a 25-bps cut, I think Powell’s tone may just reinforce what the market is already expecting.
If we do see another drop after Powell’s speech, I’d actually treat it as a buying opportunity. With sector rotation happening, small caps and housing-related names could benefit the most once rates move lower. For me, I’ll be watching closely on Friday to see if the 2025 “Jackson Hole dip” playbook repeats itself.
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