This past weekend, the world’s top economic leaders gathered in Wyoming for the annual Jackson Hole Symposium. It’s not just a meeting in the mountains—it’s often where the Federal Reserve (the Fed) signals what might be coming next for interest rates, the job market, and the economy overall.

This year carried extra weight. Fed Chair Jerome Powell gave what may be his final big speech before stepping down next year, and he hinted strongly that the Fed will likely cut interest rates at their September meeting. Why? The job market has cooled—unemployment has risen from 3.4% to 4.2% in the past year—and inflation, while still a concern, isn’t running as hot as before. The mix of slower growth and cooling prices means the Fed may ease up to support the economy.

Markets liked the clarity: stocks rallied, bond yields fell, and investors felt some relief knowing the Fed seems ready to act. But looking further ahead, there’s uncertainty. Leadership changes at the Fed, political pressure from Washington, and questions about long-term interest rates all add to the mix. The Fed is also still shrinking its massive balance sheet (essentially unwinding pandemic-era stimulus), which could keep markets bumpy.

For everyday households, what does this mean? Borrowing costs—like mortgage rates, car loans, and credit cards—may come down a bit if the Fed does cut rates. At the same time, interest earned on cash accounts slowly drift lower. For investors, LPL Research suggested staying balanced.

Bottom line: The Fed seems ready to cut rates in September, which should give the economy a short-term boost. But the bigger picture is still uncertain, so it’s wise to stay focused on long-term goals rather than short-term swings.

-Mark & Elise

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