This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:
The chart of the day
What we're watching
What we're reading
Economic data releases and earnings
The Fed is delivering on rate cut hopes.
The initial reactions from analysts and investors following Wednesday's meeting, statement, and press conferences pointed to what amounted to near certainty of the Fed delivering a September rate cut.
As Lazard's chief market strategist Ronald Temple wrote, "The FOMC has clearly telegraphed a September rate cut."
Powell, for his part, said that a rate cut is very much on the table for September. But while a coming easing cycle might be inevitable, the timing of the first cut still remains at least a little uncertain, despite what the market might suggest.
"Certainty is not a word we have in our business," Powell said during the press conference that wrapped the July meeting. "We get a lot of data between now and September. And it isn't going to be one data read or even two, it's going to be the totality of the data," he said.
Powell once again leaned on his data-driven refrain that nothing is set in stone because there's always more information to analyze.
But, again, ask pretty much anyone not named Jerome Powell and they'll tell you that July's Fed meeting was likely the last under the pandemic tightening regime.
Investors might as well have been on the podium in Paris, belting the national anthem. The Nasdaq Composite's daily gains somersaulted up 3% following Powell's remarks (before eventually closing 2.6% up).
"The broad sense of the committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate," he said. And the Fed softened its policy statement to reflect newfound optimism. A clause from the Fed's statement that previously read "modest further progress" on tackling inflation turned into "some further progress" on Wednesday. Wall Street translated the dense Fedspeak into "U-S-A! U-S-A!"
If officials continue to see encouraging signs of cooling inflation, reasonably strong growth, and a resilient labor market, Powell said, “I think a rate cut could be on the table in September.”
But he pumped the brakes to say that if price pressures remained stubborn, the Fed would consider a range of factors. “It’s not going to be just any one thing."
Market bets didn't bother to take the Fed's qualifying statements seriously. The CME FedWatch tool registered a 0% chance that rates remain the same in September.
Even if Powell says he can't rely on the concept of certainty, everyone else is.
Let the easing begin.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance