US STOCKS: Late Equities Roundup: Tech, Industrials, Discretionary Shares Weigh

Powell notes the slowdown in private domestic final purchases in the GDP data today. But says "you do not see weakening in the labor market", though "downside risks to the labor market are certainly apparent." 

Powell says that he expects there is "much more" to come on the trade front that keeps uncertainties elevated, despite increasing clarity about the eventual "effective" rate of tariffs:

"It's been a very dynamic time for these trade negotiations, and lots and lots of events in the intermeeting period. We are still a ways from seeing where things settle down. We are getting clearly more and more information and I think at this point people's estimates, our estimates, outside estimates of the likely effective level of tariffs is not moving around that much at this point. But at the same time, there are many, many uncertainties left to resolve. So yes, we are learning more and more. It doesn't feel like we are very close to the end of that process. And that's not for us to judge, but it feels like there's much more to come as well, looking ahead."

First Q is whether expectations of a September cut is realistic.

• A: Powell does not give much away here but certainly stops short of saying that September is live. He starts by saying he considers policy as "modestly restrictive". He says "Inflation is running a bit above 2% as I mentioned, even excluding tariff effects. The labor market is solid historically low .... it seems to me and to almost the whole committee that the economy is not performing as a restrictive policy is holding it back inappropriately, and modestly restrictive policy seems appropriate.... All that said, there's also downside risks to the labor market."
• "In coming months, we'll receive a good amount of data that will help inform our assessment of the balance of risks in the appropriate setting of the federal funds rate... this is an intermeeting period when we'll get two full rounds of employment and inflation data before the time of the September meeting, we have made no decisions about September, we don't we don't do that in advance."