Wall Street is betting on Powell to confirm a rate cut, but a miss could spark negative sentiment

BlockBeats news, August 19, according to market data, Wall Street bets that Federal Reserve Chairman Powell will confirm that the Federal Reserve is about to cut interest rates at the Jackson Hole Annual Meeting. But as the focus shifts from "whether there will be a rate cut" to "how much the rate cut will be," stock traders may be disappointed.

"If traders hear that there will be an upcoming rate cut, the stock market will react positively," said Eric Beiley, executive managing director of wealth management at Steward Partners Global Advisory. "If you don't hear the information you want, it will trigger a massive sell-off." The market fully expects the Federal Reserve to start cutting interest rates at the September meeting. But Powell could easily keep his mouth shut about the timing of the rate cut when he speaks on Friday. According to his characteristics, he is also likely to take a cautious and ambiguous approach to reveal how much interest rates may fall after the Federal Reserve completes its easing. "The market is confident that interest rates will be cut soon," Beiley said. It would be a huge surprise if Powell did not emphasize that this is the future path.