8/25/2025
By Charles Payne CEO & Principal Analyst

All the pieces I read said Powell was going to come in hawkish and take this last chance in the ‘Old West’ to take shots at Trump, focus on Fed independence, and rescue the damsel in distress: Fed Governor Cook.

Instead, Jay Powell took the opportunity to make history in a different and more meaningful way.

It was monumental, and the stock market recognized it immediately.

The financial media missed the most relevant parts of Powell’s speech by focusing on the line that implied there would be a September rate cut.

I must admit he was bobbing and weaving so much at the start of his presentation that it felt like he was laying the groundwork not to cut rates.

Highlights

Labor

Labor revisions have not opened a large margin of slack.

Other labor conditions have also changed little or softened only modestly.

Tariffs

A reasonable base case is that the effect will be relatively short-lived (one-time shift in price levels).

We will not allow a one-time increase in price to become an ongoing inflation problem.

Those comments seemed to ignore the significance of recent labor market trends and also underscore Powell’s contagion that this time tariffs could lead to more than a one-time price hike.

Then came this line that became the Wall Street headline:

This was a thirteen-page report, and there was much more to go, even as the street had what it wanted – the green light on a September rate hike.

The Chicago CME FedWatch probability surged, and one measure saw a 100% chance for a rate cut.

But the probability slipped over the weekend, and Bloomberg noted that Fed speak was hawkish last week.

To read the full report, contact your account representative or email Info@wstreet.com.

Charles Payne
Wall Street Strategies

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