Powell's speech 'doomed to disappoint' markets: Strategist

The Federal Reserve's 2024 Economic Symposium begins today in Jackson Hole, Wyoming, with markets (^DJI, ^IXIC, ^GSPC) eagerly awaiting commentary from Fed Chair Jerome Powell regarding the central bank's outlook on monetary policy adjustments. Annex Wealth Management chief economist and strategist Brian Jacobsen joins Morning Brief to provide insights on the event.
Jacobsen suggests that market expectations for Powell's speech may be overly optimistic. He notes that these high expectations could lead to Powell being "doomed to disappoint." Jacobsen speculates that Powell might indicate the Fed could reduce the federal funds rate without actually easing monetary policy, "simply because inflation has come down."
"In a way maybe it's gonna be a little bit of a disappointment for people who are expecting a big message about monetary easing, because it's just about trying to keep policy from becoming more restrictive as inflation continues to trend towards 2%," Jacobsen explains.
When asked about the market's interpretation of economic data, Jacobsen notes that it largely depends on "what the Fed is likely going to do as it relates to that data." However, he cautions that if the Fed were to cut interest rates, it would take time for the economy to feel the effects.
"It's not necessarily the first cut that is going to help the economy; in fact, it could actually hurt by actually lowering the interest income that savers get," Jacobsen states.
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Need a hole in one from Powell with an interest rate cut of 0.5 basis points on September.

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[stephenbush]

No rate cuts!! Rate cuts are not in the best interests of the people. Rates are not too high where they are, prices are too high. Any cut now is WAY too soon. I believe rates should never fall below 5% in a properly managed economy, and never below inflation as has been the case in recent years. Consumers and the economy need more than just a slowing of inflation. We need deflation to bring prices down to reasonable levels so all Americans can better participate in the economy, and we need these and higher rates to help retired people especially earn income without having to risk in the markets. Sustaining economic activity right now should not be the primary concern. We should stop rash moves to bail out the rich and do what is right for most of us long-term. We need a recession, and we need to let deflation do and finish its work. There is no good long-term reason to lower rates better than leaving them where they are. They are where they should be in a healthy economy. The economy is struggling at these "normal" rates because the economy is sick, grossly mismanaged, and needs a flushing out of people who have caused these problems. Lower rates mostly serve Wall Street and the rich. Lower rates generally won't help people buying a home because the realtors and home builders will raise the price of homes in response to the lower rates. They will sell it for as much as they can trying to max out the payment that you can make! Lower rates won't benefit most Americans. Lower rates mean higher prices for everything bought on time immediately, and more inflation on everything else long-term. Housing and other big-ticket items like cars are too high already because of rates being way too low for too long and mostly only benefiting one out of ten people, and inflationary government spending. Prices need to come DOWN not go further up. We need a massive reset in the economy along with common sense policy and culture changes! We need to go back to the policies and culture that WORKED! We need massive cuts on government spending and an end to wasting Americans dollar resources, and we need NO MORE BAILOUTS of poorly run companies. Bribes and collusion among government and the rich which is abusing America's dollar resources must be stopped. No more destructive uses of our resources and NO rates cuts. The markets and the economy need a major readjustment that only deflation and reduced spending can bring about! Inflation and a wildly over-spending government that has to then pay interest on the debt will destroy the dollar! Eventually inflation will rise so high that the government will ADMIT it is higher that it has been saying it is and that it can’t pay an interest rate above the real inflation on its notes WITHOUT printing more money, and then we will be finally heading into a crisis that will bring on severe poverty. Inflation, overspending, debt, corruption, and moral decline are the real threats to our economic livelihoods. The Fed SHOULD NOT take its foot off the neck of inflation by lowering the rates. Rather than lowering rates the government should start lowering spending into a range it can support WITHOUT printing more money!

[robertwieczorek]

All those charts show are the rich getting richer and the poor

[invisiblesun]

Market's gonna be pretty disappointed when next month a rate cut doesn't happen. The premature celebrating already signals inflation is going to spike between now and next month's CPI report. And when said report reflects that hike say buh-bye to rate cuts. Expect a rate HIKE instead. Probably no more than 25 bps though.

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This speech will decide the presidential Election

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He might just shock everyone with a interest hike to really kill inflation once for all and a 50 bps would certainly do it.Then when the whole economy finally tanked and unemployment hits 10%, he and his team can then slowly cut rates at leisure for the next 5 years at 25 bps each quarter.

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Powell is going to just say sorry, I don’t have much new to say. This dog and pony is getting old.

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