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Federal Reserve chair Jerome Powell spelled out in plain English what financial markets had already anticipated: The central bank is about to cut its benchmark interest rate.In a speech at the Jackson Hole Economic Policy Symposium conference Friday, Powell said it was time for the Fed to make a major shift in its economic balancing act in which it seeks to keep the fed funds rate high enough to prevent inflation from overheating and low enough to keep unemployment from rising. That means cutting the rate from its current range of 5.25%-5.5%, its highest since 2001, where it’s been held for more than a year in an effort to push inflation down. 

“The time has come for policy to adjust,” Powell said. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”The Fed was already widely expected to cut the fed funds rate when its policy committee next meets in September. Recent economic data has shown that since 2022, the inflation rate has fallen from a 40-year high almost back to pre-pandemic levels. At the same time, the unemployment rate has steadily risen, fueling worries that the economy could enter a recession if interest rates stay high. 

Financial market participants took Powell’s comments as a signal that steeper rate cuts are on the table.

Speculation focused on whether the Fed would open its rate cut campaign with a 0.25 percentage point cut or a steeper 0.5 percentage points. The odds of a larger cut rose to 34.5% late Friday morning, up from 24% the day before, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

Powell used the speech to give a broad overview of the Fed’s fight against inflation since March 2022, when the central bank began raising its benchmark interest rate to counteract a worrisome price spike for consumer goods and services. The inflation rate peaked in June 2022 at an annual increase of 9.1%, according to the Consumer Price Index, and has fallen since then to a 2.9% annual increase as of July.High interest rates are meant to combat inflation by raising borrowing costs on mortgages, credit cards, car loans and other kinds of credit, discouraging borrowing and spending and allowing supply and demand to rebalance. 

Indeed, the housing market has slowed to a near standstill under high mortgage rates, and consumers have struggled to afford vehicles amid high interest rates on loans, prompting price cuts from dealers.Powell highlighted another aspect of high interest rates: they’re meant to signal the Fed’s determination to push inflation down. The theory goes that if the public believes inflation will be low in the future, people will feel less pressure to make financial decisions that would push up inflation. 

For example, if individuals believe inflation will stay high, they might make major purchases sooner to get ahead of price increases, stoking demand and prompting merchants to raise prices.According to surveys of public opinion, most people never believed inflation would stay high for very long, and Powell credited that psychological factor with helping inflation cool down without the recession or spike in unemployment that many economists had anticipated. 

“Disinflation while preserving labor market strength is only possible with anchored inflation expectations, which reflect the public's confidence that the central bank will bring about 2% inflation over time,” he said. “That confidence has been built over decades and reinforced by our actions.”

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Nestlé SA shares fell in Swiss trading Friday, a day after the chocolate maker replaced Chief Executive Officer (CEO) Mark Schneider amid slowing sales.

Schneider, who also is resigning from the board, will be replaced on Sept. 1 by veteran company executive Laurent Freixe, who heads its Latin American operations.

During his eight years with Nestle, Schneider focused the Swiss firm "on high-growth categories like coffee, pet care and nutritional health products," the company said.

But Nestle shares have fallen almost 10% this year amid declining sales as increasingly frugal consumers watch their spending.

In a note titled "The start of a new era?" UBS analysts said the replacement of Schneider wasn't surprising given the Swiss firm's disappointing "operational and share price performances" in the last two-and-a-half years, as well as "an unusually high number of negative headlines."

During Schneider's tenure, Nestle navigated multiple scandals, including an ongoing investigation in France after two children died eating frozen pizza contaminated with E. coli.

Nestle shares slipped 1.2% to 88.40 Swiss francs in intraday trading Friday. Its American depositary receipts (ADRs), which trade Over-the-Counter (OTC), were up 4% about 30 minutes after the opening bell.

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The saga for control of Paramount Global (PARA) continues, with Skydance Media reportedly demanding that the entertainment giant stop negotiating with Edgar Bronfman Jr.

Skydance, in a letter from its lawyers, said Paramount's special committee breached the terms of its takeover agreement for Shari Redstone's media empire by extending the "go-shop" deadline to Sept. 5, according to .

Paramount on Wednesday extended the deadline to assess bids rivaling Skydance's after receiving Bronfman's reported $6 billion offer for Redstone's National Amusements and a minority stake in the entertainment giant.

Skydance said Bronfman's bid for control of Paramount isn't superior and therefore the deadline shouldn't have been extended, the  reported. 

David Ellison's company had agreed to a deal with Redstone worth more than $8 billion that involved buying National Amusements and merging Skydance with Paramount, the  reported last month.

Bronfman's offer is the latest in a series of bids for control of Paramount in recent months. The entertainment firm, which owns CBS, MTV, and its eponymous movie studio, has been struggling as the rise of streamers like Netflix (NFLX) disrupt traditional networks.

Paramount shares are slipping 1.6% about 45 minutes before the opening bell Friday. They have lost about a quarter of their value year-to-date.

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A recently married man has sparked controversy after some of his old comments about women were dug up by some netizens.

Several of his comments appeared to be antagonistic towards women, which left many wondering what type of husband he would be towards his wife.

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Federal Reserve chair Jerome Powell will make a highly anticipated speech this morning in Jackson Hole, Wyoming, with investors closely watching to see what he says about potential interest-rate cuts; Canada orders an end to the lockout by the country's two big rail operators; Skydance Media reportedly seeks an end to Edgar Bronfman Jr.'s bid for Paramount Global (PARA); Workday (WDAY) shares are jumping in premarket trading after the human resources software provider posted quarterly results that beat estimates; and Nestlé (NSRGY) stock is falling in Swiss trading after the chocolate maker replaced Chief Executive Officer (CEO) Mark Schneider amid sluggish sales. U.S. stock futures are rising ahead of Powell's speech as indexes to end the week higher despite yesterday's drop. Here's what investors need to know today.

Investors will be closely watching the speech this morning by Federal Reserve chair Jerome Powell at the annual Jackson Hole symposium for signals that the Fed is on course to cut its benchmark interest rate from a 23-year high when policymakers next meet in September. The minutes from the Fed's July policy meeting on Wednesday showed increasing support for a rate cut at the policy committee's next meeting, and investors will be looking for signals from Powell on both the pace and the magnitude of cuts this year. While the Fed's high interest rates have helped bring inflation closer to its annual target rate of 2%, recent data that showed the July unemployment rate jumped to 4.3% have sparked policymakers' concerns about the strength of the labor market.

One of Canada's two biggest freight railroad operators ended its lockout of unionized workers while the other prepared to resume operations after Ottawa ordered an end to their stoppages, which threatened trade with the U.S. and the national economy. Canadian National Railway (CNI) said it ended its employee lockout effective at 6 p.m. ET Thursday, while Canadian Pacific Kansas City (CP) said it is "preparing to restart railway operations." The two had locked out nearly 10,000 workers just after midnight Thursday after unsuccessful negotiations with the Teamsters Canada union. The Canadian government ordered the end to the lockouts after less than a day, and said an arbitrator would negotiate between the rail operators and the union.

The saga for control of Paramount Global (PARA) continues, with Skydance Media reportedly demanding that the entertainment giant stop negotiating with Edgar Bronfman Jr. Skydance, in a letter from its lawyers, said Paramount's special committee breached the terms of its takeover agreement for Shari Redstone's media empire by extending the "go-shop" deadline to Sept. 5, according to . Paramount on Wednesday extended the deadline to assess bids rivaling Skydance's after receiving Bronfman's reported $6 billion offer for Redstone's National Amusements and a minority stake in the entertainment giant. Skydance said Bronfman's bid isn't superior and therefore the deadline shouldn't have been extended, the reported. Paramount shares are slipping more than 1% in premarket trading.

Workday (WDAY) shares are soaring more than 12% in premarket trading after the human resources and capital management software provider reported better-than-estimated quarterly results and pointed to growth opportunities in international markets. The company's stock, which is down around 25% from its record close through Thursday, has come under investor scrutiny this year over concerns that enterprise customers have trimmed spending on premium software subscription services amid macroeconomic uncertainty.

Nestlé SA (NSRGY) shares are falling 2% in Swiss trading after the chocolate maker replaced Chief Executive Officer (CEO) Mark Schneider amid slowing sales. Schneider, who also is resigning from the board, will be replaced on Sept. 1 by veteran company executive Laurent Freixe, who heads its Latin American operations. During his eight years with Nestle, Schneider focused the Swiss firm "on high-growth categories like coffee, pet care and nutritional health products," the company said. But Nestle shares have fallen 10% this year amid declining sales as increasingly frugal consumers watch their spending.

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