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The big story
Cutting time
It’s not a matter of if. It’s a matter of how much.
That’s the thinking around interest-rate cuts heading into the Fed’s annual summer symposium kicking off today in Jackson Hole, Wyoming. The event includes Friday’s highly anticipated speech from Fed Chair Jerome Powell.
Rate cuts are a lock for the Fed’s next meeting in September. But there’s still plenty of intrigue. Instead of wondering if they’ll come, experts are focused on how deep they’ll go, writes Business Insider’s Ayelet Sheffey.
According to CME’s FedWatch tool, which tracks the probability of the Fed’s decision, a standard quarter-point cut is the odds-on favorite. But the chance of a larger cut of 50 basis points has gained steam throughout the week, with the tool giving it about a 31% chance.
New data from the Bureau of Labor Statistics released Wednesday only muddied the waters. The report indicated job growth from April 2023 through March 2024 was worse than previously reported, with a downward revision of more than 800,000 jobs.
It’s the largest downward revision in over a decade (bad), but it’s also not entirely unexpected (good). Experts were predicting a drop as big as a million jobs.
It’s another example of the gray area the economy has existed in for the past year, bouncing between fears of a full-blown recession to belief in the possibility of a soft landing.
That’s why Powell’s keynote address at 10 a.m. EDT will draw the most interest.
The speech has a history of being a big one for Powell, writes BI’s Huileng Tan. Two years ago he made clear the Fed was taking a hawkish approach to get the economy in shape, a promise he certainly made good on.
Claudia Sahm, the creator of the recession indicator that sent the market into a tizzy, recently analyzed Powell’s previous Jackson Hole speeches. What she found was Powell’s fondness for citing lessons from previous monetary policies, which isn’t always helpful considering how unique the current economy is.
Still, Powell’s unlikely to tip his hand too much lest he send the market skyrocketing or into a tailspin. He hasn’t wavered on his mission of bringing inflation down. Even in the face of failing banks, a looming presidential election, and a mini-meltdown earlier this month, he’s avoided knee-jerk reactions.
Instead, the speech will likely offer some vague clues about the Fed’s future plans that are enough to pique interest but fall short of guarantees. Talk of continuing to monitor the data, a go-to Powellism over the past year, will likely make an appearance.
In short, expect just enough hedging to keep the market on its leash until September.
News brief
Top headlines
3 things in markets
- The guy who kept telling us to not worry about the economy is suddenly worried about the economy. Renaissance Macro Research’s Neil Dutta constantly pushed back on Wall Street’s prediction that a recession was coming in 2023. Now he sees the current downward outlook for the labor market as one that’s not easily reversible.
- How to get your financial weight up with a “barbell” investing strategy. Sherry Jiang is a financially independent investor thanks to her mix of low-risk ETF investments coupled with risky bets like crypto. By focusing on the extreme ends of the investing spectrum — hence the “barbell” strategy — she gets the best of both worlds.
- Venture capital is out, generational wealth is in. Amid a turbulent few years in VC, the management offices of the world’s richest families are stepping up to the plate to make risky bets on startups. Family offices have a huge advantage in this market: While VCs look for 10-year exits, family offices play the long game.
3 things in tech
- HR tech is a nightmare. To work in 2024 is to drown in a sea of workplace apps, many of which can make you feel like you’ve never used a computer before. Here’s why they’re such a pain for employees to use.
- Put it in reverse. Ford just canceled its plans for electric three-row SUVs, intending to replace them with hybrid models instead. That move is expected to cost the automaker $2 billion amid other growing pains in the EV market. It’s further evidence a truly affordable EV is still a long way off.
- ChatGPT, roast my Instagram in one paragraph. The hot new digital self-deprecation trend is to upload screenshots of your Instagram profile and ask an AI chatbot to roast it. Degrees of meanness vary. Prompt it at your own risk.
3 things in business
- Your favorite LinkedIn influencer might be a ghostwriter. As the platform becomes more cool, some executives are turning to PR firms to run their LinkedIn profiles. It’s turning ghostwriting into a booming business.
- Walmart’s boss charts how to rise to the top. In an interview with the Stratechery podcast, CEO Doug McMillon shared his top three tips for moving up the corporate ladder. He’d know, having started his 40-year career at the retailer making $6.50 an hour on the loading docks.
- Meet 17 PR pros helping influencers grow their careers. Business execs aren’t the only ones who need PR guidance. Some of the most successful content creators across YouTube, Instagram, and TikTok are turning to these PR professionals to promote their work.
In other news
What’s happening today
- Jackson Hole Economic Policy Symposium begins.
- Google’s new smartphones, the Pixel 9 and Pixel 9 Pro XL, hit the market.
- Democratic National Convention concludes with an acceptance speech from Kamala Harris.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.
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