Smigiel: The market has had euphoria around almost a certainty for a cut

Market Expectations & Fed Policy - The market anticipates a potential rate cut, with initial euphoria possibly waning due to comments from a Fed president and resilient PMI data [2] - Expectations for a September rate cut have decreased to approximately 70% [3] - The market is awaiting Chair Powell's speech at 10:00 a m Eastern time for clarity on the Fed's stance, particularly regarding the labor market and inflation [1][3][4] - The investor community is particularly interested in whether the Fed will prioritize the jobs market over inflation, considering tariff-related price increases as potentially "transitory" [7] Economic Data & Analysis - Despite firming inflation, significant price increases expected from initial tariff deals have not materialized [6] - There have been massive revisions to jobs reports, including a large yearly revision of nearly 1 million jobs earlier in the year [6] - Carson Group's research indicates that historically, if the Fed cuts rates in September, the market tends to be down 1% the following month but up almost 13% the following year [9] Investment Strategies & Recommendations - The analysis suggests diversifying risk portfolios globally, by sector, and by factor, with a potential shift towards value investing [11] - Gold is suggested as a potential hedge against a weakening US dollar, especially as the Fed potentially enters a second phase of easing with GDP running at approximately 2% [12][14] - The expectation is for the Fed to implement a 25 basis points cut, primarily influenced by the labor market [11] Future Outlook - The key question is whether the market's expectation of two rate cuts by 2025 will be met or exceeded [10] - The US debt situation and its impact on the dollar's strength are significant factors influencing investment decisions [13]