Will Fed Chair Jerome Powell Signal a Bigger-Than-Expected Rate Cut?

A higher Fed rate cut may be politically challenging - CIO

The eight consecutive daily gains marked the longest winning streaks for the S&P 500 and the Nasdaq since November and December, respectively.

On Thursday, representatives from central banks around the globe are expected to converge in Jackson Hole, Wyoming, for their annual Economic Symposium, where U.S. Federal Reserve Chair Jerome Powell is scheduled to deliver remarks on Friday.

Market participants will closely analyze Powell's speech for hints regarding the number and timing of expected policy rate cuts this year and next.

"The key question is whether the rate cut will be 25 or 50 basis points, and much of the market's reaction will hinge on interpreting how aggressive that first cut might be," Carlson said.

Currently, financial markets are pricing in a 69.5% likelihood of a 25 basis-point reduction in the Fed funds target rate at the conclusion of the Federal Open Market Committee meeting in September, with a 30.5% chance of a larger 50 basis-point cut, according to CME's FedWatch tool.