TOKYO
Global investors are weighing the prospects of an interest rate cut in September by the U.S. Federal Reserve, after Chair Jerome Powell signaled at the annual Jackson Hole symposium that easing may be on the horizon.
“The balance of risks appears to be shifting,” Powell said on Aug. 22, noting a slump in employment even as inflation remains above target.
He added that the “unusual” situation “may warrant adjusting our policy stance.”
“By hinting that the Fed could cut even without pristine inflation numbers, [Powell] transformed caution into conviction,” Stephen Innes of SPI Asset Management wrote in a note Monday.
“Expectations for a September cut now hover near certainty,” he added.,
Investors love lower interest rates, even if they risk adding to inflation.
The Fed has kept benchmark interest rates steady at a range of between 4.25 percent and 4.50 percent since its last reduction in December.
Oil markets were nearly flat yesterday, following price increases made last week as investors considered the potential for a peace deal in Ukraine more than three years after Russia’s invasion.
Traders are now eagerly awaiting a quarterly earnings report from U.S. chip juggernaut Nvidia tomoorw, which is expected to shed light on how its strong push into artificial intelligence is faring.
Nvidia’s role as a key supplier of chips for artificial intelligence and its heavy weighting give it outsized influence as a bellwether for the broader market.
