Monetary Matters with Jack Farley Breaking Down Powell’s Jackson Hole Speech, September Rate Cut Odds, and Chinese Consumer Lending FinTech’s | Jack & Max
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Aug 22, 2025 Jerome Powell's speech at Jackson Hole has sparked speculation about imminent interest rate cuts, with fascinating implications for small-cap stocks. The Fed's long-term approach to inflation management is under scrutiny, revealing evolving insights into the labor market. Meanwhile, there's an optimistic outlook on Chinese consumer lending fintech, highlighting investment strategies amidst regulatory changes. The discussion also touches on the impact of political dynamics on monetary policy, adding layers to the financial conversation.
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Powell's Speech Moved Markets Without Saying 'Cut'
- Jerome Powell's Jackson Hole language implied a September rate cut without explicitly promising one.
- Markets interpreted the speech as dovish and pushed bond yields down and equities up rapidly.
Data Before September Meeting Still Matters
- Markets now price a very high probability of a September cut but data ahead of the meeting could still change odds.
- Important upcoming prints include PCE, August jobs, and the September 11 inflation report.
Cutting With Rising Core CPI Is Unusual
- Historical precedence suggests cutting when core CPI is above 3% and rising is rare.
- A September cut with rising core CPI would be an unusual policy move according to Warren Pi's framework.