Two the Point — Shifting Gears: Powell Signals Rate Cuts on the Horizon

Andrew Davis, CFA®

Bryn Mawr Capital Management

< 1 min read

August 30, 2024

Two the Point

Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Symposium solidified expectations for upcoming rate cuts, highlighting a shift towards a more neutral monetary stance amid signs of a cooling but resilient labor market. The U.S. economy continues to show mixed signals, with strength in the services sector offsetting weaknesses in goods, and early indications of a rebound in interest-rate-sensitive sectors.

Key Insights:

Federal Policy Shift: Powell’s speech confirmed that the Fed is on a path to lower interest rates, with cuts expected to begin in September, aligning with global central banks.
Labor Market Resilience: Despite downward revisions to payroll data, unemployment claims data suggests underlying labor market strength.
Housing Market Rebound: New home sales in the U.S. surged by 10.6% in July, suggesting early positive responses to declining interest rates.
Sector Performance: The services sector continues to demonstrate resilience, offsetting the rolling recession in goods, and supporting a disinflationary economic trend.

Andrew Davis, CFA®

Bryn Mawr Capital Management

Andrew Davis leads a team that analyzes broad economic trends and factors that impact global and national economies. He joined the company in 2019.

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Wilmington Savings Fund Society, FSB d/b/a/ Bryn Mawr Trust.Bryn Mawr Trust is a division of WSFS Bank.WSFS Wealth Management, LLC d/b/a Powdermill Financial Solutions, LLC. Powdermill Financial Solutions, LLC is a subsidiary of WSFS Financial Corporation.Bryn Mawr Trust Company of Delaware is a subsidiary of WSFS Financial Corporation.Products and services are provided through WSFS Financial Corporation’s subsidiaries and their affiliates.Trust and investment advisory services are offered through Bryn Mawr Trust. Bryn Mawr Trust is not a registered investment advisor.Investment advisory services are also offered through Bryn Mawr Capital Management, LLC (“BMCM”), an SEC registered investment advisor and a subsidiary of WSFS Financial Corporation. BMCM’s Registration as an investment advisor does not imply a certain level of skill or training.

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