Economic news

The stock prices of banks that have large exposure to commercial real estate loans surged after comments from Federal Reserve Chair Jerome Powell. His remarks could be a sign that relief is coming on both sides of those banks' balance sheets.

In his speech at the Federal Reserve's Jackson Hole Economic Symposium, the Fed chair said employment losses are now a bigger risk than elevated inflation.

"Fed watchers will be parsing Powell's comments for signs that a 50bp rate cut is on the table for September," noted Lauren Saidel-Baker, an economist with ITR Economics. "However, the notoriously tight-lipped chair is unlikely to confirm this, making a 25bp cut the most likely outcome."

Over the weekend Republican vice presidential nominee Sen. JD Vance, R-Ohio, said setting interest rates should be a "political decision" with input from elected officials.

As the 2024 election season once again puts the Federal Reserve's independence under a microscope, some observers see a weakness in one of the landmark policy arrangements that undergird the financial system as we know it.

Gary Quinzel, vice president of portfolio consulting at Wealth Enhancement Group, gives his views about monetary policy and offers his opinion on the FOMC statement and Fed Chair Jerome Powell's press conference.

Federal Reserve Gov. Christopher Waller said that economic data seems to indicate that the economy will achieve a so-called "soft landing" but said he would like to see additional data before the central bank cuts interest rates.

The Federal Reserve chairman has two years left in his term, which he will serve regardless of who occupies the White House. Powell's term on the Fed Board of Governors expires in 2028.

The central bank also noted that the banking system is sound but faces several challenges. The report precedes Federal Reserve Chair Jerome Powell's upcoming appearances on Capitol Hill.

All eyes are on the Federal Reserve as the wait for rate cuts continues. Steve Skancke, chief economic advisor at Keel Point, will discuss the Federal Open Market Committee meeting, the Summary of Economic Projections, and Chair Powell's press conference.