Marketplace All-in-One A bit of a Jackson Hole hangover
4 snips
Aug 25, 2025 Markets celebrated the prospect of a Federal Reserve interest rate cut, but now face complications from a weakened labor market. The irony of this situation raises questions about economic stability. Meanwhile, strict immigration policies are impacting labor dynamics, as well as financial troubles for China’s Evergrande. Australia steps into the spotlight, hoping to alleviate rare earths supply issues in light of China’s tightening controls. Uncertainty looms as tariffs and policy decisions shake the economic landscape.
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Rate-Cut Cheer Masks Economic Weakness
- Markets cheered a likely Fed rate cut even though it signals a weakening economy.
- Julia Coronado warns weaker labor conditions complicate the Fed's trade-off with inflation.
Lower Policy Rates Won't Immediately Cut Mortgages
- Lower policy rates may not quickly translate into lower long-term rates like mortgages.
- Coronado notes the Fed must move slowly because inflation remains a risk.
Tariffs Raise Prices And Discourage Hiring
- Tariffs can raise prices by acting like an import tax while also discouraging hiring.
- Firms face so much uncertainty from trade policy they delay adding workers, weakening the labor market.