Federal Reserve Chair Jerome Powell framed Wednesday’s quarter-point rate cut as a “risk management” move, sparking market concerns, according to MarketWatch. He also pushed back against a half-point reduction supported only by the new governor, Stephen Miran. Goldman Sachs economist David Mericle said markets may have misinterpreted Powell. He pointed to the Fed’s dot plot favoring three cuts in 2025, the dovish labor market language, and Powell’s acknowledgment that the job market is cooling off. Mericle also noted that insurance cuts typically come in consecutive moves and that Powell emphasized following the expected path of rates, signaling the likelihood of another cut in October. The S&P 500 slipped 0.10% Wednesday but closed at its third-highest level ever. Futures rose 0.74% Thursday, and the 2-year Treasury yield fell four basis points to 3.53%.
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00:02Federal Reserve Chair Jerome Powell framed Wednesday's quarter-point rate cut as a risk management move sparking market concerns, according to MarketWatch.
00:09He also pushed back against a half-point reduction supported only by the new governor, Stephen Mirren.
00:13Goldman Sachs economist David Miracle said markets may have administered turbine Powell.
00:17He's pointing to the Fed's dot plot favoring three cuts in 2025, the dovish labor market language, and Powell's acknowledgment that the job market is cooling off.
00:25The Miracle also noted that insurance cuts typically come in consecutive moves, and that Powell emphasized following the expected path of rates, seemingly the likelihood of another cut in October.
00:35The S&P 500 slipped 0.1%, Wednesday mid-closed at its third-highest level ever, futures rose 0.74% Thursday, and the two-year Treasury yield fell four basis points to 3.53%.
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