Bank of America: Powell's speech did not endorse a 50 basis point rate cut

In a report on Powell's speech at the Jackson Hole conference on Friday, Bank of America economists said that the Fed's focus on the cooling of the U.S. labor market still requires a 25 basis point rate cut in September, rather than a 50 basis point cut. Despite Powell's more dovish tone, "we don't think he opened the door to more than a 50 basis point cut," Bank of America said. "Rather, he implicitly supports gradual rate cuts." If the risk of a recession rises, a larger cut will happen. "A very weak employment report could get us there, but the decline in unemployment claims suggests that this should not be the base case." (Jinshi)