Market Report for August 28, 2023 | Affinity Capital

August 28, 2023

Jerome Powell, Chair of the Federal Reserve, gave a speech at the Jackson Hole Economic Policy Symposium on Friday, August 25, 2023. In his speech, Powell reiterated the Fed's commitment to bringing inflation down to its 2% target. He also acknowledged that the Fed's efforts to tighten monetary policy could lead to slower economic growth and higher unemployment.

Some of the key takeaways from Powell's speech are:

  • The Fed is "strongly committed" to bringing inflation down to its 2% target.  Powell said that the Fed will continue to raise interest rates until inflation is "moving sustainably" down toward 2%.
  • The Fed is aware that its efforts to tighten monetary policy could lead to slower economic growth and higher unemployment.  Powell said that the Fed is "mindful of the risks" of a recession, but he reiterated that the Fed's top priority is to bring inflation down.
  • The Fed is "prepared to use its tools" to bring inflation down, even if it means causing some economic pain.  Powell said that the Fed is "not going to hesitate" to take action to bring inflation under control.

Powell's speech was widely interpreted as a signal that the Fed is prepared to continue raising interest rates aggressively in order to bring inflation down. This is likely to lead to higher borrowing costs for businesses and consumers, which could slow economic growth and lead to higher unemployment. However, Powell made it clear that the Fed is willing to take these risks in order to achieve its inflation target.

The markets reacted positively to Powell's speech, with stocks and bond yields rising. This suggests that investors believe that the Fed is taking the right steps to bring inflation under control. However, it remains to be seen how the economy will respond to the Fed's tightening cycle.

Some of the key questions that remain unanswered after Powell's speech are:

  • How high will the Fed raise interest rates?  Powell did not provide any specific guidance on how high the Fed will raise interest rates. However, he did say that the Fed is "prepared to use its tools" to bring inflation down, even if it means causing some economic pain. This suggests that the Fed is willing to raise interest rates to a level that will significantly slow economic growth.
  • How will the economy respond to the Fed's tightening cycle?  It is still too early to say how the economy will respond to the Fed's tightening cycle. However, there is a risk that the Fed's actions could lead to a recession.
  • What will the Fed do if inflation does not come down?  If inflation does not come down, the Fed will have to decide whether to continue raising interest rates or to adopt other measures, such as quantitative easing.

Powell's speech was a significant event that will have a major impact on the economy. It remains to be seen how the economy will respond to the Fed's tightening cycle, but Powell's comments suggest that the Fed is prepared to take whatever steps are necessary to bring inflation down.

We continue to monitor the statements relating to policy and how it may affect your investments. As always, please contact us with any questions you may have.

Signals from the Fed: Inflation, Growth, and What Comes Next

August 22, 2025
It was a Fed-heavy week, with three major developments that matter for markets and the economy. FOMC minutes (July 29–30) — released Wednesday (Aug. 20). The minutes reinforced a data-dependent stance : participants saw continued progress on inflation but noted that risks aren’t one-way, citing pockets of labor-market cooling and the growth impact of tighter financial conditions. Policymakers emphasized flexibility and the need to see inflation moving durably toward 2% before declaring victory. For investors, the takeaway is that the bar for rapid policy shifts remains high, but the Committee is clearly keeping both sides of the mandate in view. Weekly balance sheet (H.4.1) — released Thursday (Aug. 21). The Fed’s weekly statement showed the usual moving pieces: securities holdings, reserve balances, and program usage. While week-to-week changes can be noisy, the release remains a useful pulse on system liquidity and the runoff of the Fed’s portfolio under quantitative tightening . Markets watch aggregate reserves and Treasury General Account flows because they can nudge front-end rates and funding conditions at the margin. Jackson Hole — Chair Powell’s Friday address. At the Kansas City Fed’s annual symposium, Chair Powell underscored that policy decisions will continue to be guided by incoming data . He highlighted the balance between sustaining expansion and finishing the job on inflation , noting tariff-related price pressures and supply-chain considerations among factors being monitored. The message: no preset path, but openness to adjust as evidence accumulates. Historically, Jackson Hole is more about long-term framework and risk management than near-term moves, and that tone held this year. What it means for the days ahead Near-term market drivers will be how inflation and labor data align with the Fed’s “proceed carefully” posture. • If inflation continues to edge lower while growth holds steady, the door stays open to gradual policy easing later this year. • If price pressures re-accelerate—or if hiring slows more sharply than expected—the Fed may extend its wait-and-see approach. Liquidity dynamics from the Fed’s balance sheet runoff will remain a background factor , but the central story is still inflation’s glide path and the durability of demand . Investors should expect choppy trading around key data releases , with markets pricing probabilities rather than certainties. As always, we welcome your questions and are here to support you . At the heart of everything we do is our commitment to “ Wealth Management for Life ”—providing enduring guidance for you and your family’s financial success.

Fed Moves and Market Trends | Affinity Capital

August 6, 2025
Markets entered the week with a boost of optimism, fueled by softer labor data and growing chatter that the Federal Reserve might be leaning toward a rate cut this fall. But that optimism didn’t last long . As the week unfolded, economic uncertainty returned to center stage: fresh concerns about tariffs, underwhelming corporate earnings in some sectors, and signs of consumer fatigue in key parts of the economy tempered the early enthusiasm.

Weekly Market Update: Stability Amid Data and Tariff Jitters | Affinity Capital

July 17, 2025
This week’s stock markets were marked by tight trading ranges, record-setting highs in tech, and a backdrop of macro uncertainty. The S&P 500 (through SPY), Nasdaq (QQQ), and Dow (DIA) eked out modest gains, shrugging off headline volatility tied to Fed independence concerns and escalating tariff threats.