Powell’s Jackson Hole Gibberish Unleashes Wall Street Stampede (Cheap Money Is BACK!)

“Nothing to see here, just a totally neutral rate cut with zero political pressure.” -Jerome Powell at Jackson Hole this morning.

Well, it wouldn’t be a Jackson Hole speech without the collective financial world breaking into hives and Powell lobbing word salads that could rival Kamala’s infamous “the significance of the passage of time” moment. Only this time, he actually dialed it back. The takeaway was almost shockingly digestible: the Fed is cracking the door open for a September rate cut.

And let’s not act surprised, we were all sure this would happen (at least 99% sure). Trump’s been on Powell like a helicopter parent screaming at the ref at a Little League game, and for once, the scoreboard actually tilted his way. Job growth has slowed to a crawl… July added just 73,000 jobs, and earlier months were revised down by about 250,000. For the Fed, that’s the labor market lighting a flare gun. Meanwhile, tariffs are still out there like Freddy Krueger hiding in the shadows, threatening to pump inflation higher if they want. Powell admitted inflation risks are “tilted to the upside,” but his vibe screamed: unemployment keeps me up at night more than CPI prints.

Of course, Jerome had to cosplay as Captain Independent. He basically looked dead into the camera and said, “We’ll never deviate from the data,” as if Trump hasn’t been calling him a numbskull, threatening resignations, and waving around the Fed’s sketchy $3.1 billion HQ reno with infinity pools and bowling alleys like blackmail material. Powell’s up there doing his best hostage impression… blinking SOS in Morse code while holding a metaphorical “not coerced” sign.

His money quote was peak Powell hedging: “With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Not sure where he learned to talk like this (maybe an improv class taught by Siri?), but let me translate: conditions suck, so yeah, we’re cutting… I just won’t say it plainly because my whole personal brand is hiding behind 14 layers of “maybe, possibly, potentially.” Markets didn’t need the decoder ring. Within minutes, the Dow popped 600+, the S&P 500 ripped 1.3%, and Treasury yields faceplanted. If Powell’s goal was calm, he basically handed Wall Street a pina colada, pointed to the pool, and said, “Go nuts, boys.”

Markets might be hammered off Powell’s “maybe we’ll cut” hints, but the sober read is this: the Fed’s still camped out at 4.25%-4.5%, which is nosebleed AF compared to Bush and Obama, who had to yeet rates to the basement when Lehman and Bear Stearns went full Road Runner off the cliff. Powell’s been LARPing as Mr. Tough Guy, playing chicken with the economy, and (no surprise) the economy blinked first.

(Source: New York Times)

Hiring’s cooling, spending’s softening, and vibes are looking recession-core. The whole thing feels like running your iPhone at 2% battery while you’re still doomscrolling TikTok at 3 a.m. Like yeah, technically it’s alive, but everyone knows that sh*t’s about to hard reset the second you hit the funny part.

All that to say, the Fed knows it can’t keep slamming the brakes just to prove it’s in charge. Breaking the economy to “teach inflation a lesson” is like Walter White blowing up half of Albuquerque just to win an argument with Gus (and no one walks away better off). So now the tone is shifting from “hawk” to “ok, maybe let’s not be complete psychos.” And Wall Street knows the playbook by heart: historically, when the Fed pauses for 5-12 months between cuts, stocks finish higher 10 out of 11 times in the next year. That’s a 91% win rate… better odds than meme-stock traders spamming “to the moon” the second a ticker trends on Reddit. Naturally, Wall Street’s already buying the rumor before Powell can even sell the news.

Which is why the whole “this is all about the data” shtick rings hollow. Let’s be real: Trump’s tantrums mattered. The labor market slowdown mattered. Powell’s pride (and maybe that bougie $3.1B HQ reno with the infinity pool) mattered. That’s why he hid behind central banker code instead of just admitting, “We’re cutting because we have no choice.” But the market doesn’t care about the Fed’s theater or who gets the last word. All it heard was: cheap money is back, baby!

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.