Interest Rates: What Powell’s Speech Means for the Rest of 2025

At the Jackson Hole symposium last week, Federal Reserve Chair Jerome Powell signaled a shift in tone. He acknowledged a cooling labor market alongside stubborn inflation and noted that the Fed now has “room to maneuver” on rates.

Markets reacted quickly: stocks rallied to record highs and investors boosted expectations of a possible September rate cut.

Why It Matters

   •   Borrowing costs could ease if cuts arrive, affecting mortgages, business loans, and consumer credit.

   •   Savings yields may come down from recent highs if rates start to fall.

   •   Current markets tend to welcome lower rates, but Powell emphasized that decisions remain data-driven.

The Bottom Line

Powell’s remarks don’t guarantee rate cuts, but they do appear to mark a meaningful shift. For now, the Fed is balancing two risks—slowing growth and lingering inflation—while leaving the door open to change course as the rest of 2025 unfolds.

By John Tanner, VP | Regional Leader | Wealth AdvisorFI Advisors, Inc.913 N PATTERSON STVALDOSTA, GA 31601 229-232-8211

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