- Friday’s booming rally turned into Monday’s reality check as investors weighed just how aggressive the Federal Reserve will be on lowering interest rates.
- The implied probability for another cut in October was just 42%. That second cut is about fully priced in for December, but there’s just a 33% expectation for three total moves this year.
- There are ongoing questions about the impact of Fed rates in the current climate.
Friday’s booming rally turned into Monday’s reality check as investors weighed just how aggressive the Federal Reserve will be on lowering interest rates and how the moves might impact the broader business and economic climate.
Chair Jerome Powell, in his annual address at the Jackson Hole, Wyoming, symposium, gave Wall Street hope of easier days ahead when he said conditions “may warrant adjusting our policy stance,” which is generally seen as “Fedspeak” for cutting rates.
Stocks soared while Treasury yields plummeted on the news as the knee-jerk reaction took hold for a rate reduction when the Federal Open Market Committee issues its next decision on Sept. 17.
Source: https://www.cnbc.com/2025/08/25/markets-are-sure-the-fed-will-cut-in-september-but-the-path-from-there-is-much-murkier.html