The Time Has Come for Policy To Adjust
Additional content provided by Colby Hesson, Analyst, Research.
Federal Reserve (Fed) Chair Jerome Powell headlined last week’s Jackson Hole Economic Symposium, titled “Reassessing the Effectiveness and Transmission of Monetary Policy." In his speech, he could not have been more clear: “The time has come for policy to adjust." The fed funds futures market expects a rate drop next month. Implied probabilities for a 0.25% reduction in the target rate remain at 100%, while the odds for a 0.50% rate cut are currently at 35%. Powell has stated the Fed’s future decisions will be data-driven, and thus it may be too early to say. Next month's employment report will likely reveal whether we will get a 0.25% or 0.50% cut.
