Fed Chair Jerome Powell’s dovish remarks at Jackson Hole signaled a potential September rate cut, sparking a rally in U.S. equities and a sharp decline in the dollar.
Key moves
- Powell’s speech at Jackson Hole hinted at a September rate cut, with a dovish tone that lifted expectations of easing.
- U.S. stocks surged: NASDAQ closed 0.58% lower for the week but rallied on the day; S&P 500 +0.27%, Dow +1.53%; Russell 2000 +3.30%.
- U.S. Treasury yields fell across the curve, with the 2‑year down 9.8 bps to 3.694%, 5‑year 10.2 bps to 3.757%, 10‑year 7.8 bps to 4.253% and 30‑year 4.7 bps to 4.876%.
- The dollar weakened sharply against major peers: EUR –1.0%, GBP –0.98%, JPY –0.83%, CHF –0.92%, CAD –0.60%, AUD –1.07%, NZD –0.86%.
- European markets finished higher, with the DAX +0.29%, CAC +0.40%, FTSE 100 +0.13% and record highs in Spain and Italy.
- Fed policy remained data‑driven; Fed officials, including Hammack, signaled caution but acknowledged the risk of a September cut.
- Fitch reaffirmed the U.S. AA+ rating; Russia’s Putin hinted at improving U.S.–Russia relations.
- Other headlines: WTI crude settled at $63.66; Canada to lift tariffs on U.S.; Trump threatened to fire Fed Governor Cook.
Summary
Powell’s dovish comments at Jackson Hole lifted expectations of a September rate cut, sending U.S. stocks higher and Treasury yields lower while the dollar slid. European indices followed the upbeat tone, posting record highs in several markets. Market participants remain focused on forthcoming U.S. jobs and inflation data that will confirm whether the Fed’s path stays data‑driven or moves toward easing.
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