U.S. Federal Reserve Chair Jerome Powell said during his speech in Jackson Hole, Wyoming on Aug. 22 that current economic conditions “may warrant” interest rate cuts in coming months.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
However, Powell also sounded a note of caution, saying once again that there is a high level of uncertainty related to tariffs and a rise in inflation that is making the job of forecasting and managing monetary policy difficult.
“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” said Powell, referencing interest rates. The highly anticipated speech at the Fed’s annual meeting in Jackson Hole also noted “sweeping changes” in tax, trade, and immigration policies that are likely to impact the future direction of the American economy.
Downside Dangers
Powell also acknowledged in prepared remarks that the U.S. labor market remains healthy and the economy overall has shown “resilience.” However, he said downside dangers are rising and that import tariffs are causing risks that inflation could rise again — a stagflation scenario that the central bank must avoid at all costs.
Markets are currently pricing in a 25-basis point rate cut from the U.S. Federal Reserve at its next policy meeting on Sept. 17. The central bank has held its benchmark borrowing rate in a range between 4.25% and 4.50% since December 2024. Powell’s latest remarks come with U.S. President Donald Trump ratcheting up pressure on the central bank to begin cutting interest rates to boost the economy.
Is the SPDR S&P 500 ETF Trust a Buy?
The SPDR S&P 500 exchange-traded fund (SPY) currently has a consensus Moderate Buy rating among 504 Wall Street analysts. That rating is based on 418 Buy, 80 Hold, and six Sell recommendations issued in the last three months. The average SPY price target of $719.03 implies 11.43% upside from current levels.
Read more analyst ratings on the SPY ETF
Stay ahead of macro events with our up-to-the-minute Economic Calendar — filter by impact, country, and more.