Markets rejoiced this week as the message from Jackson Hole was clear - the Fed is ready to lower interest rates. The markets are currently pricing a ~85% probability that they will ease in 3 weeks when they meet. Here is the summary paragraph towards the end of Powell's speech, pasted below in the original dialect of Fedspeak in which it was delivered:

"Putting the pieces together, what are the implications for monetary policy? In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate. Our policy rate is now 100 basis points closer to neutral than it was a year ago, and the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance. Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance." - Jerome Powell

Here's my translation into English:

"Inflation is too high and probably rising. In countries where inflation gets out of control, everything - and I mean everything - often falls apart very quickly, but I'm not going to particularly concern myself with that. Meanwhile, aggregate measures of growth are more or less fine, with some pockets of weakness that monetary policy mostly can't influence. The stock market and all of the most speculative parts of markets are screaming that growth is fine and that liquidity is abundant. Based on all of that I should do nothing or maybe consider tightening. Instead I am going to gaslight the listener and just assert that policy is restrictive, despite the brunt of the evidence pointing to the contrary, and ease anyway"

As investors we have to be realists and position our portfolios based on the world as it is, not how we think it should be...even when it makes us shake our heads.