On August 23, Eastern Time, Powell stated at the Jackson Hole Global Central Bank Annual Meeting that "the time has come" and issued the clearest signal of a rate cut in September to date. After Powell's remarks, global stock markets hit historic highs, with the MSCI ACWI index (global all-country index) rising over 9% since its low on August 5
At 10 a.m. Eastern Time on August 23, Powell stated at the Jackson Hole Global Central Bank Annual Meeting that "the time has come," issuing the clearest signal of a rate cut to date, hinting at a Fed rate cut in September.
Following Powell's remarks, the prospect of low interest rates in the U.S. and strong economic resilience boosted the stock market, with global stock markets hitting historic highs. U.S. small-cap stocks and chip stocks rose by about 3%, the MSCI ACWI index (global all-country index) rose by 1.2% yesterday, up over 9% since the low on August 5, U.S. bond yields declined, and the U.S. dollar followed suit.
Currently, the S&P 500 index is less than 1% away from its historical high, and the Nasdaq 100 index, dominated by technology stocks, still needs to rise by over 4% to recover losses from the past few weeks. Japanese, Taiwanese, and South Korean stocks were hit hardest in recent sell-offs, but have now become the best-performing stocks globally.
Currently, the market expects a one-third chance of a 50 basis point rate cut by the Fed in September, with a two-thirds chance of a 25 basis point cut. Traders expect the Fed to cut rates by about 100 basis points by December