Overview

• Odds for a September move rose into the mid‑80% range on CME FedWatch and LSEG after Jackson Hole, with a brief risk‑asset rally fading as the dollar retraced most of its drop.
• Morgan Stanley reversed its stance to forecast 25 bp cuts in September and December, joining Goldman Sachs, JPMorgan, Barclays, Deutsche Bank and BNP Paribas, while BofA remains the notable holdout.
• Powell signaled the balance of risks has tilted toward labor‑market weakness, stressed decisions will be data‑driven, and framed tariff effects as a likely one‑time price level shift.
• Traders now price roughly 54 bp of easing by year‑end, and analysts note any larger initial cut would likely require sizable payroll declines and could face FOMC dissents.
• Political tension escalated as President Trump claimed to fire Fed Governor Lisa Cook; Cook said the president lacks authority and she will not resign, reinforcing scrutiny of Fed independence ahead of the Sept. 16–17 meeting and key PCE, CPI, PPI and Sept. 5 jobs data.