report and next week’s busy economic calendar, including a highly anticipated August employment report and the Institute for Supply Management Purchasing Managers’ IndexAs highlighted in “It’s Go Time for the Federal Reserve”, Fed Chair Jerome Powell stated, “The time has come for policy to adjust,” citing diminishing upside inflation risk and rising downside risk to employment as catalysts for the policy pivot. As highlighted below, the fed funds futures market has fully priced in a 0.
We believe a soft landing is still viable but not guaranteed, setting stocks up for a potential volatile fall, likely exacerbated by the November election. Stocks have historically traded flat to negative in the first few months after a rate-cutting cycle begins but tend to move higher over the following 12 months.
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