Fed continues to signal potential rate cuts
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Fed continues to signal potential rate cuts

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Barbara Reinhard

Barbara Reinhard, CFA

CIO, Multi-Asset Strategies and Solutions

Glass buildings

At Jackson Hole last week, Fed Chair Jerome Powell hinted the Fed could cut rates in September, but emphasized decisions will remain data-dependent and insulated from political pressure. Let’s look at what that might mean for your portfolio. 

The Fed is caught between softer payrolls and still-elevated inflation. Job growth numbers for May-July have been markedly slower, yet inflation has exceeded the Fed’s 2% target and is expected to continue, in part from tariff pass-through into consumer prices. 

For investors, this push-pull of labor and inflation argues for flexibility rather than a headline-driven pivot. We still favor U.S. large caps for their pricing power and operational resilience. With markets pricing about two cuts by year-end, nimble investors could consider a tactical, short-to-medium-term rotation into rate-sensitive assets. 

Maverick Lin contributed to this article. Data from U.S. Bureau of Labor Statistics.

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