We're going to go right now to Jay Powell has become speaking and delivering this speech. >> In my remarks today, I will first address the current economic situation in the near term outlook for monetary policy. I will then turn to the results of our second public review of our monetary policy framework, as captured in the revised Statement on Longer Run Goals and Monetary Policy Strategy that we released today.When I appeared at this podium one year ago, the economy was at an inflection point. Our policy r ...

In my remarks today, I will first address the current economic situation and the near-term outlook for monetary policy. I will then turn to the results of our second public review of our monetary policy framework as captured in the revised statement on longerrun goals and monetary policy strategy that we released today. When I appeared at this podium one year ago, the economy was at an inflection point.Our policy rate had stood at 5 and a/4 to 5 1/2% for more than a year. That restrictive policy stance was ...

We're a few moments away this morning from Fed Chair Powell's speech at the Fed Symposium in Jackson Hole. Let's bring in Apollo's global management chief economist Torstson joins us here at Post9. Happy Friday.It's good to have you with us, especially today. I mean, we we look at your charts every day. You clearly have some sympathy for the conundrum the Fed finds itself in.>> Yeah, because on the one hand, inflation is going up and as Sarah was just saying, anecdotes in this earning season have certainly ...

Labor Market Trends - US unemployment benefit applications rose to the highest level since June [1] - Continuing claims also climbed, indicating a slowdown in the US labor market [1]

Core Points - The Federal Open Market Committee (FOMC) is reviewing its monetary policy strategy, tools, and communication practices, with significant progress noted towards revising the consensus statement on longer-run goals and monetary policy strategy [3] - Financial market developments indicate stable policy rate expectations, with equity prices increasing and credit spreads narrowing, reflecting a resilient U.S. economy [4][8] - Inflation remains elevated, with consumer price inflation estimated at 2.5% and core inflation at 2.7% as of June [15] - The labor market shows solid conditions, with an unemployment rate of 4.1% and average hourly earnings rising by 3.7% year-over-year [16] - Economic growth is projected to remain low, with real GDP growth expected to be modest through 2027, influenced by various factors including tariffs and financial conditions [35][44] Financial Market Developments - The expected path of the policy rate and longer-term Treasury yields remained largely unchanged, with equity prices increasing and credit spreads narrowing [4][6] - The S&P 500 index valuations are above long-run averages, driven by optimism in technology firms benefiting from AI adoption [8] - The dollar index has depreciated slightly, indicating relative stability in foreign holdings of U.S. assets [9] Economic Situation - Real GDP expanded at a slow pace in the first half of the year, with consumer spending growth slowing and residential investment declining [14][44] - Net exports contributed positively to GDP growth in the second quarter, with a significant decline in imports following earlier front-loading [18] - Foreign economic activity showed signs of slowing, particularly in Canada, while China's GDP continued to grow moderately [19] Labor Market Insights - The labor market remains tight, with low unemployment and solid job gains, although some indicators suggest a potential softening in labor demand [42] - The participation rate has slightly decreased, and the employment-to-population ratio remains unchanged [16] Inflation and Monetary Policy Outlook - Inflation is projected to rise in the near term, with tariff effects becoming more apparent, although longer-term expectations remain anchored [38][41] - The FOMC decided to maintain the federal funds rate target range at 4¼ to 4½ percent, with a commitment to support maximum employment and return inflation to the 2% objective [60][55] - Participants noted the importance of monitoring incoming data to inform future monetary policy adjustments, particularly in light of elevated risks to both inflation and employment [51][56]

Monetary Policy Stance - The Federal Reserve (FED) perceives inflation risk as exceeding unemployment risk [1] - The FED anticipates a potentially prolonged period before the impact of tariffs becomes evident [1] - The market interprets the FOMC minutes as not indicative of a bullish outlook [1] Forward Guidance - The market awaits Friday's speech for further clarification regarding potential rate cuts and quantitative easing (QE) [1]

Interest Rate & Inflation - Current inflation rate is at 2% [1] - Unemployment is not a significant concern [1] - Interest rates are considered surprisingly high given the inflation and unemployment situation [1] - Suggestion for immediate interest rate cuts [1] Market Recommendation - Call to "unleash the market" [1]

India’s new monthly labor report doesn’t give a full picture of unemployment in the economy because of the vast amounts of informal sector jobs, according to a well-known economist and author https://t.co/O5vy5m40h8 ...

Employment Challenges - Young Canadians, from engineering graduates to high school students, are facing difficulties in finding employment [1]

Market Outlook & Fed Policy - Jackson Hole symposium is crucial this year, potentially influencing market trades next week [1] - The market has priced in aggressive rate cuts despite high inflation, strong retail sales, and low unemployment [3] - Premature rate cuts could stir up inflation, orthodox central banking suggests waiting for a clear economic slowdown [4][5] - Powell's Jackson Hole address could either validate rate cut expectations, leading to curve steepening, or push back, further pressuring long-end yields [6][7] - The market currently prices in an 85% chance of a September Fed rate cut [8] - The Fed might not mind current rate cut pricing, acknowledging the possibility of needing aggressive cuts if the economy significantly slows [8] AI Sector Vulnerability - The AI sector, particularly Magnificent Seven stocks, is acutely vulnerable to a hawkish outcome from Jackson Hole due to their long duration nature [11] - Increased CapEx in the AI sector has created higher duration assets, making them more susceptible to higher interest rates [13] - Potential tariffs on chips and concerns about revenue sharing models pose risks to AI companies' profit margins [14] - While Nvidia's upcoming earnings are expected to be positive, the AI boom might be backward-looking, making the sector vulnerable in the coming month [15]