Business
Investors Brace for Market Changes as Fed Signals Rate Cut

WASHINGTON, D.C. — Investors are approaching the final week of August with heightened optimism following Federal Reserve Chair Jerome Powell‘s supportive comments at the Jackson Hole Economic Symposium. Powell indicated that recent trends in U.S. labor data present rising risks to employment, a message interpreted by the markets as a strong signal for a potential rate cut in September.
During his speech, Powell emphasized concerns about the labor market, stating, “Downside risks to employment are rising.” His remarks have led many analysts to predict that the Fed might implement a 25 basis point rate cut at its meeting scheduled for September 16-17, unless upcoming economic data reflects unexpected improvements.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, noted, “Unless we see a major positive surprise in the next jobs data, September will bring the first rate cut since last September’s cut of 50 basis points.” She added that inflation data released this week will heavily influence the Fed’s future decisions.
This week, key economic updates await. On Thursday, the U.S. GDP update is expected to show a rebound of 3% in the second quarter, while on Friday, the Core Personal Consumption Expenditures (PCE) index will be released. Economists forecast a 0.3% increase month-over-month for the Core PCE, potentially pushing the annualized rate close to 2.9%.
“Whether strong GDP or inflation data will derail the dovish Fed expectations remains uncertain,” Ozkardeskaya said. “However, Powell’s message was unmistakably clear regarding September actions.” Additionally, several Fed officials will speak this week, providing further insights into the Fed’s monetary policy direction.
Nvidia‘s upcoming earnings report on Wednesday marks another event for investors, as its stock has surged 32% this year and the company has guided for revenue of approximately $45 billion. This report could also influence market momentum, as analysts are closely watching for any signs of slowing demand.
Other companies like Okta and MongoDB will also report earnings, contributing to a busy week for market watchers. The combination of inflation data, Fed commentary, and major earnings reports will significantly affect whether the current market rally continues into September.