Ryan Severino, in BGO’s The Chief Economist, highlighted the market’s euphoric reaction to Federal Reserve chair Jerome Powell’s recent Jackson Hole speech, which signaled a shift in risk assessment toward supporting the labor market over controlling inflation. While a September rate cut is not guaranteed, markets are pricing in a high probability of one. Inflation pressures from tariffs remain, but the Fed seems more concerned about labor market weakness, given its historically longer recovery times compared to inflation.
In addition, he notes that the U.S. de minimis exemption, which allowed duty-free imports under $800, will end on Aug. 29, 2025, for all countries (already eliminated for China and Hong Kong in May), meaning low-value imports will now face duties.
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