Market MakeHer Podcast

46. Fed Update: What is Event Risk? Could it Trigger a Sell-Off?

Aug 2, 2024
The discussion kicks off with a surprising announcement from Fed Chair Jerome Powell about no rate cuts, sparking market reactions. Unemployment has risen to 4.3%, a significant jump that raises recession fears. The hosts dive into how high rates are reshaping consumer behavior, with large companies like Procter & Gamble and McDonald's reporting revenue declines. They explore 'event risk' and its potential to destabilize markets. Lastly, expect shifts toward defensive investments as jobless claims spike.
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INSIGHT

Fed Looks At The Totality Of Data

  • Jerome Powell emphasized the Fed uses the totality of data, especially PCE, GDP, and employment, to decide policy rather than single prints.
  • Powell is seeking consistent evidence that inflation is sustainably declining before cutting rates.
INSIGHT

Markets Rapidly Price Fed Signals Then React

  • Markets initially rallied on Powell's hints about potential September cuts but then reversed after weak employment data.
  • This shows markets rapidly price Fed signaling but remain vulnerable to incoming economic prints.
ANECDOTE

Earnings Show Consumers Pulling Back

  • Jess highlighted real company earnings showing consumer pullback, like Wayfair's sales decline and P&G misses.
  • She used these examples to show higher rates are hurting demand and corporate revenues today.
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