Jerome Powell‘s Big Speech in Jackson Hole.

Jerome Powell‘s Big Speech in Jackson Hole.
Natalie's Note on 8.22.2025 (after Powell's speech)
“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Jerome Powell at Jackson Hole on 8.22.2025. Wall Street celebrates the assumption that there will be a rate cut in Sept. Expectations of a rate cut then are now at 91.5% (source: CME Group). It's important, however, to note that going from 4.25-4.50% to 4.0-4.25% is no magic pill for all of the challenges going on right now, unaffordable housing for Millennials and Gen Z, paper losses for Gen X and Boomers, higher costs for small businesses, etc. The Thrive Budget and our pie chart strategy for investing (including retirement plans, checking/savings, crypto+) are time-proven at protecting wealth in corrections and outperforming the bull markets. Join us for our Financial Freedom Retreat ONLINE Oct. 11-13, 2025. Email [email protected]. Get additional information at the flyer (click to access).
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On Friday, Aug. 22, 2025, at 10 am ET (7 am PT), Jerome Powell will give a keynote at the Jackson Hole meeting. This is a highly anticipated speech, and the stakes are high. Investors will be watching it. Will he or won’t he signal a rate cut for the September 17, 2025 FOMC meeting? How will that affect stocks on Friday and for the rest of the year?
 
Here are the topics I’ll cover in this blog.
 
Wall Street Thinks There Will be a Cut in September
Minutes from the July FOMC Meeting Indicate…
Will the S&P500 Sink or Soar on Friday After Powell’s Remarks?
Will Stocks End Up or Down in 2025?
What Should You Do?
 
And here is more information on each topic.
 
Wall Street Thinks There Will be a Cut in September
According to the CME group, there is a 74% probability of a 25-basis point rate cut on September 17, 2025. 26% of futures’ investors believe that the FOMC will pause again and keep rates where they are.
 
The probabilities have been whipsawing a great deal, however. Last week, everyone believed the FOMC would pause.
 
Minutes from the July FOMC Meeting Indicate…
According to the minutes from the last meeting, inflation remains a greater concern than unemployment. The word inflation was mentioned 65 times in the minutes compared to employment, which was only mentioned 25 times. According to the minutes, “With regard to the outlook for inflation, participants generally expected inflation to increase in the near term. Participants judged that considerable uncertainty remained about the timing, magnitude, and persistence of the effects of this year's increase in tariffs.” When inflation is a concern, interest rates are higher to try to tame the price increases.
 
Meanwhile, unemployment is still low. The participants expect that the labor market will weaken “around the end of this year.” Once the FOMC gets concerned about layoffs, they will want to cut interest rates to help the economy grow.
 
Clearly, these two scenarios are at odds with one another. When inflation and unemployment rise in tandem, requiring the opposite remedy, the Federal Reserve Board governors must determine which is the bigger bugaboo. During the Volcker Stagflation period, the Fed Fund Rate peaked at 20% (and we’re worried about 4.5%)!
 
As of the June 2025 meeting, when the FOMC released their Summary of Economic Projections, we were expected to get two rate cuts in 2025, taking the Fed Fund Rate down to 3.9%. We’ll get the next SEP forecast on Sept. 17, 2025, along with the news of a pause or a 25 basis point cut. Interest rates have been paused at 4-1/4 to 4-1/2 percent since December of 2024.
 
Will the S&P500 Sink or Soar on Friday After Powell’s Remarks?
Jerome Powell has been clear that he wants the Federal Reserve Board to be independent from White House pressure. (He has succumbed to Trump pressure in the past, in the now notorious decision to let inflation get out of control during the pandemic.) However, this time he’s very close to his retirement and may have more of a Devil May Care attitude that allows him to stick to his principals. Powell is notorious for saying that everything is data dependent. He often kicks the ball forward to the meeting, noting that the FOMC participants will review fresh data and make their decision at that time. In other words, investors might be very disappointed with his remarks. If he signals a cut, Wall Street could celebrate.
 
It will be a big surprise (in my view) if Powell signals a rate cut at the September meeting. It seems more likely (IMHO, after 20 years of Fed-Speak) that Powell will be keep his cards close to his chest. The speech comes early in the day. Expect a lot of activity when he’s finished around 10:30 a.m. ET.
 
Will Stocks End Up or Down in 2025?
The U.S. economy has been very resilient amidst a great deal of turmoil. A lot of that has to do with investments in AI and the Wall Street trillion-dollar darlings known fondly as the Magnificent 7. However, the good news is already priced in. By many measures, stocks are overvalued. Also, the economy is expected to slow down to 2.1% GDP growth from 2.8% last year. That’s not bad in terms of performance, given all the tariff wars and real battles going on. However, it’s not great considering how lofty valuations are.
 
The reason that economists and analysts use percentages and probabilities instead of sure-fire predictions is that stocks are fueled by investor sentiment. While there have been plenty of reasons for profit taking, investors have been ignoring all kinds of troublesome news, including tariffs, persistent inflation, war, isolationism, slower GDP growth, inflated prices, unsustainable debt, unaffordable housing, and much more.
 
Citi has a target for the S&P500 of 6,600, which they released on August 11, 2025. The S&P500 is currently at 6,370. So, if the index hits its target price, that will be an increase of 3.6% from where it is now. Goldman Sachs warned on August 14, 2025, that there was heightened risk of a stock market correction (-10%). J.P. Morgan analysts, including Jamie Dimon, are in the cautious correction risk camp as well.
 
What Should You Do?
Rather than think we can outsmart Wall Street, it’s a good idea to always have an age-appropriate, properly diversified strategy. Using our pie chart system, we can protect our wealth from corrections and stock plunges and profit from the best performers, all while earning a good income on the safe side, without paper losses.
 
It is equally important to know what is safe in a world where over half of the S&P500 companies are at or near junk status. We hear a lot about the $37.2 trillion public debt. However, corporate debt is astronomical as well, at $14 trillion. Consumer debt is also at an all-time high ($18.4 trillion). Student loan delinquencies are elevated at 13%. Credit card delinquencies are also starting to creep up. Since about 70% of the U.S. economy is fueled by consumer spending, these statistics are troubling.
 

Bottom Line
Wall Street is trading near an all-time high, and could go up another 3.6%, if Citi’s forecast is right. On the other hand, since equity prices are very expensive, when investors worry about the future, stocks drop far and fast and the correction scenario (-10%) could materialize. In April, the drop was -19%. Sure, everything recovered. However, that is not always the case. A better strategy is to have a plan that protects our wealth from downturns, with the liquidity to buy on the dip, instead of riding the Wall Street rollercoaster. We also want to make sure that we have a piece of the hot companies (Magnificent 7) which have accounted for most of the gains on Wall Street since 2023.
 
In the meantime, our safe side can earn close to 4%, if we know some very important tricks on how to navigate elevated credit and duration risk. The fixed income side is very tricky, and those paper losses are far more problematic than Main Street is being told.
 
It’s human nature to wait and see and try to fix things when they are broken. When it comes to our money, that’s a bad strategy.
 




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Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money (6th edition) and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is (2nd edition) are the most recent releases of these books. Follow her on Instagram. 
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Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.​​

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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly-traded companies, funds or projects mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect an age-appropriate, diversified wealth plan, which has been designed strategically, with the assistance of financial professionals who are familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge, patience and diversified strategy.  
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Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.