Powell signals 90% September rate cut chance as Trump trade deals boost markets

Investor sentiment surged in late August 2025, driven by statements from Federal Reserve Chair Jerome Powell and developments from Donald Trump. Powell’s recent comments, particularly around the possibility of a September rate cut, shifted market expectations significantly. Initially at 75%, the probability of a cut climbed to 90% following his remarks [1]. The Fed chair emphasized a cautious, data-driven approach while signaling openness to reducing borrowing costs amid evolving labor and inflation trends [2]. These developments contributed to a broad rally in global equities and cryptocurrencies, with Bitcoin rising past $116,800 [3].

Simultaneously, Trump’s announcements added to the bullish tone. His administration confirmed a major agreement involving Intel, aimed at mitigating tariff pressures and easing trade tensions [4]. The deal, which includes the U.S. potentially acquiring a 10% stake in the chipmaker, reflects broader efforts to reduce costs for American consumers and stabilize key technology sectors [5]. Trump also commented on Powell’s rate-cut signals, suggesting he believed the Fed should have acted earlier [6]. These political and monetary signals collectively reinforced market optimism.

The convergence of Powell’s hints at rate easing and Trump’s trade initiatives has shaped investor behavior. Stock futures climbed ahead of Powell’s major speech at the Jackson Hole symposium, and the U.S. dollar gained modestly as traders recalibrated positions [7]. Meanwhile, U.S. Treasury yields edged higher, indicating a slight moderation in expectations for rate cuts [8]. The nuanced messaging from the Fed, balancing support for economic growth with inflation control, has been closely scrutinized by analysts and traders alike.

As the week progresses, market participants are closely watching Powell’s speech for more definitive guidance on the Fed’s rate path. Given the interplay between monetary and fiscal policy, particularly in the context of Trump’s recent trade announcements, the direction of global markets in the near term remains highly contingent on further clarity [9]. The dual forces of potential rate cuts and strategic trade adjustments continue to shape the economic narrative and influence asset valuations.

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[1] https://en.coin-turk.com/powells-interest-rate-promises-and-trumps-bold-announcements-boost-markets/

[2] https://www.noradarealestate.com/blog/jerome-powell-hints-at-federal-reserve-rate-cuts-in-jackson-hole-speech/

[3] https://cryptodnes.bg/en/bitcoin-soars-above-116800-as-powells-fed-shift-boosts-crypto-demand/

[5] https://www.marketscreener.com/news/treasuries-us-yields-advance-as-fed-rate-cut-bets-ease-before-powell-s-remarks-ce7c50dad88dfe24

[6] https://www.nytimes.com/spotlight/donald-trump?page=7

[7] https://www.morningstar.com/news/dow-jones/202508222533/european-midday-briefing-stocks-up-investors-jittery-ahead-of-powell-speech

[9] https://www.yahoo.com/news/videos/powell-addressing-jackson-hole-forum-173145133.html