Financial Markets Grapple with Implications of Fed's Shift in SignalsLast week saw financial markets grapple with the implications of Fed Chair Jerome Powell's speech at the Jackson Hole symposium. In brief:
 
Federal Reserve Signals Rate Cuts: Fed Chair Jerome Powell stated "the time has come for policy to adjust," indicating the Fed is prepared to begin cutting interest rates. This dovish shift sparked a rally in equities and a decline in bond yields on Friday.

Mixed Economic Data: U.S. durable goods orders rebounded strongly in July, up 9.9% month-on-month, but this was largely due to volatile aircraft orders. Core capital goods shipments, a key indicator of business investment, fell 0.4%, suggesting potential weakness in Q3 GDP.

Global Growth Concerns: The German Ifo business climate index fell to 86.6 in August, with the current conditions reading at its weakest level since August 2020, highlighting ongoing concerns about European economic growth.

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