🚨 UPDATE: There is now a 75% chance of a rates cut in September. https://t.co/2OlNyb25DT ...

Inflation has direct and indirect effects on real estate, and on this real estate investment trust's business as a whole.Core U.S. inflation rose by 0.3% month over month in July, its highest increase in six months. That put the trailing-12-month inflation rate at 2.7%.The Motley Fool has studied inflation, and it's a fascinating look at the prices we pay. In the past, the S&P 500 has performed well when inflation was within its current range. But, be careful. When inflation runs hot and prices increase too ...

Monetary Policy Stance - The Fed is under pressure to cut rates but is seeking more data before committing [1] - The Fed is subtly shifting expectations towards a rate cut, acknowledging a shifting balance of risks [2] - The shifting balance of risks may warrant adjusting our policy stance [2] - A rate cut in September is not guaranteed, and the August labor market numbers will be critical [12][13] Labor Market Analysis - The labor market appears to be softening, with a slower pace of hiring due to decreased immigration [3][4] - The labor market is weak enough that the Fed doesn't foresee substantial inflation increases from second-round effects [5][6] - The balance of risk on labor is tilting to the downside, even as inflation risks are to the upside [3] Inflation Concerns - Core inflation remains well above the 2% target, and has not budged downwards [6] - There was no mention of the fact that we haven't seen a downward adjustment in inflation [7] - Tariffs are expected to push inflation up, but the Fed is primarily concerned with inflationary expectations feeding into wages [5][10] - The Fed will do what it takes to keep inflationary expectations anchored [10] Fed's Framework Review - The Fed is revisiting its framework, acknowledging that the previous framework was designed for low inflation, the opposite of the current problem [14][15][16][17] - The Fed is moving back to its old framework [17] Chair Powell's Legacy - Chair Powell is likely to get less credit than he should for navigating the Fed through difficult times towards a soft landing [19] - Chair Powell has displayed immense calm and equanimity amidst external pressures [20][21]

Ethereum set a new all-time high, breaking its previous 2021 record after Jerome Powell signaled the Fed would cut interest rates. https://t.co/4zqeWqg5VE ...

Interest Rate & Yield Curve Impact - Potential Fed rate cuts as early as September could steepen the yield curve, benefiting banks' net interest income [2] - Rate cuts of 25 to 50 basis points between now and year-end, and potentially further next year, are anticipated [5] Loan Growth - Consumer loan growth, particularly in credit cards, has been robust over the last two years [3] - Corporate lending has been modest, but commercial and industrial lending has shown a pickup in the last 6 to 8 weeks [4] - The industry could see loan growth exceeding 4% on an annualized basis in the current (third) quarter [4] Regional vs Money Center Banks - Regional banks benefit more from a steeper yield curve because they generate 65% to 70% of revenues from net interest income (spreads) [6] - Money center banks like JP Morgan and Bank of America generate closer to 55% of revenues from spreads [6]

Interest Rate Policy - The market anticipates a 25 basis point interest rate cut in September following guidance from Jerome Powell [1] - The Federal Reserve's decision-making will be data-dependent, assessing economic outlook and risk balance [1] - A friend of the company suggests that cutting rates into an economy where PMIs are going higher is just going to help the market in a significant way into the end of the year [1] - The company friend does not think the Fed should do a 50 basis point cut [1] Labor Market - The labor market is now considered more important than inflation in the Fed's decision-making [1] - Estimates suggest potential benchmark revisions for labor, indicating 500,000 to 900,000 job losses [1] - The labor market is more fragile than the 42% jobless rate suggests [2] Market Reaction & Economic Impact - Stocks surged 80 points and Bitcoin gapped up from $112,000 to $116,000 in response to the news [2] - Lower interest rates are generally viewed as beneficial for businesses, consumers, and investors, potentially leading to economic growth [2] - History suggests that a period of 5 to 12 months between Fed cuts is typically bullish for stocks, with the S&P 500 rising in 10 out of 11 instances [2]

Fed Rate Cut Expectations - The market initially priced in a 65% probability of a rate cut, which increased to nearly 90%, but not fully priced in for September, suggesting lingering concerns about inflation or employment data [1] - The market had priced in over one rate cut two weeks prior, but the probability decreased to 70%, reducing the need for the Fed to counter the market [3] - Bank of America initially anticipated no rate cuts this year, a view largely out of consensus, primarily due to strong inflation data [5] Fed's Stance and Rationale - The Fed believes it is starting from a restrictive stance, viewing rate cuts as recalibration rather than stimulus [2] - The Fed is under political pressure, and a dovish tone could invite criticism, influencing the decision to lower the temperature [4] - The Fed is closely monitoring the labor market, balancing supply and demand, and awaiting further jobs data to determine future actions [7][8] Data Dependence and Future Outlook - The Fed will remain data-dependent, potentially looking past inflationary risks if they perceive it as a one-time adjustment rather than a long-term trend [8] - A more rapid rise in the unemployment rate could lead to more aggressive rate cuts, with expectations of a modest rise leading to two cuts this year as part of recalibration, avoiding recession [9] - While nominal rates are declining, inflation compensation is rising, suggesting the market may show signs of inflation targets moving higher and becoming unanchored from the Fed's 2% target [11][12]

Market Focus on Fed and Nvidia - The market is in wait-and-see mode ahead of Fed Chair Jerome Powell's speech at Jackson Hole, with investors hoping for signals of potential interest rate cuts [3] - Nvidia's upcoming earnings report is considered by some to be more important than Powell's speech, highlighting the market's focus on AI [49] Interest Rate Expectations and Inflation Concerns - Markets anticipate Powell addressing inflation, with concerns that he may prioritize price stability over labor market issues, potentially reducing rate cut probabilities [14] - There's debate on whether Powell will signal a 25 basis point rate cut in September while managing inflation concerns [17] - Some analysts believe Powell may not signal any rate cuts, potentially leading to market disappointment and increased speculation on future rate cuts based on incoming data [29][31] Economic Indicators and Retail Performance - Big retailers like Walmart and Target have warned about high prices impacting their businesses, aligning with concerns from the hot Producer Price Index [9] - Consumer sentiment reports indicate rising inflation expectations, with Cleveland Fed President noting inflation has been too high for four years and trending in the wrong direction [10] - Goldman Sachs economists suggest the economy could see only 30,000 net new jobs per month in the near term [11] Tech Stock Movements - Nvidia shares are down about 2% following reports of the company pausing H20-related chip production for China due to alleged security concerns [5] - Google's Alphabet is experiencing a positive movement after winning a multi-billion dollar cloud contract from Meta spanning over six years [6] - Palantir shares are down 13% over the past five days, reflecting market nervousness, but are still up 100% year-to-date [34][35] Nvidia's Outlook and AI Market - Analysts have increased Nvidia's price targets, with the average target about 10% above current price levels, anticipating strong AI demand [41] - Concerns exist about Nvidia's potential market cap exceeding its current 8% weighting in the S&P 500 [43][51] - Nvidia's sales are expected to jump about 50% this quarter, indicating continued growth in the AI sector [53] Cracker Barrel's Logo Change Impact - Cracker Barrel initially lost $200 million in market capitalization following the CEO's decision to change the company's logo, ultimately ending the day down $100 million [39] - Cracker Barrel's total market cap now stands at $1.22 billion [40]

CNBC and streaming on CNBC plus. >> Welcome back to The Exchange. We're seeing a big divergence in the consumer trade today.Discretionary stocks are the best performers while staples is the only sector in the red after Powell paved the way for a September rate cut. My next guest expects that divide to remain. Joining me now is Savita Subramanian, head of U.S. equity and quantitative strategy of B of a securities.And Savita, it's great to have you on. This divergence we're seeing in the consumer and specific ...

Welcome to Yahoo Finance's flagship show, The Morning Brief. I'm Julie Hyman. Let's get to the three things you need to know today.First up, US stock futures little changed ahead of Federal Reserve Chair Jerome Pal's Jackson Hole speech. Investors showing caution ahead of the remarks with the S&P 500 down five days in a row. Investors largely expect Pal to indicate the policy makers will start cutting interest rates next month, but it's not a sure bet.Cleveland Fed President Beth Hammock telling Yahoo Finan ...