Fed Chair Powell Hints at Further Rate Cuts, Markets Respond Positively
Federal Reserve Chair Jerome Powell adopted a reassuring stance in his recent Philadelphia speech, signaling to investors that the central bank’s focus remains steadfast on inflation control and bolstering the softening labor market. Powell highlighted the deceleration in payroll gains and the escalating employment risks, while also emphasizing that the long-term inflation expectations continue to hover around the Fed’s 2% target.
The market responded positively to these comments, with expectations for another 25 basis point rate cut at the Fed’s October meeting rising to 96%, a 2% increase from the previous week. Powell made it clear that the Fed will “set policy based on the evolution of the economic outlook and the balance of risks, rather than following a predetermined path.”
However, the market’s confidence was shaken when President Trump accused China of economic aggression over soybean purchases and threatened to impose new trade restrictions. This resulted in the S&P 500 experiencing significant volatility, plunging as much as 1.5% before rebounding to close only slightly lower at -0.16%.
Source: https://fortune.com/2025/10/15/fed-powell-policy-hints-wall-street-upside-trump-china-soy/