Powell Says Time to Cut Rates: That's Good, Right?

From the beautiful surroundings of Jackson Hole, Jerome Powell, Chairman of the Federal Reserve, announced it was time to cut rates - finally. Stocks flew up. Interest rates fell, sending bonds up too. Oh, and gold got a boost as well. 

Everyone's happy, right?

Well, there's this: Look back and you find that when the Fed starts cutting rates, after a bout of raising them, there's an initial joyful celebration in the Stock Market. But then...

The thing is, cutting rates can - and typically does - signal that the economy needs thesupport of lower interest rates because...yep, it's either in or heading for recession. 

The message isn't really a happy one for stocks. And eventually the market realizes this.

Will that be the case this go-round? You never know anything absolutely for sure when it comes to markets. But past history certainly serves as a reasonable guide. You also never know the timing of market moves. But that's more a concern for short-term traders who wrack their brains trying call short-term moves.

It's not something the rest of us should focus on.

And let's not forget that we're heading into a time of year when - again in the past - stock market crashes made life an adventure - typically September through October. 

But wait! What about AI? Isn't that supposed to goose the stock market to the moon, spark the economy, and make this world a richer, happier place.

First thing to note is that the Great Depression unfolded in the face of what were at the time exciting technological advances. Radio, movies, even fledgling television, all emerged and grew. But the Great Depression wasn't prevented.

Now, we may not see another Great Depression (let's hope), but AI is not guarantee we avoid some sort of dislodging of the economy above and beyond the everyday recession. 

As for the stock market, who doesn't know that AI stocks were driven to nosebleed levels - somewhat similar to tech stocks in the late 90s? Remember that tech companies - the ones that actually produced something useful - really did change the world. And they really did crash in a dramatic and historic way.

As for making the world a richer, happier place, well, we'll leave that up to individual interpretation. Not that it won't have an impact on our world and thus, in some way, on each of us. The open question is whether that impact will be positive always and everywhere. If not always and everywhere, someone's not gonna be happy. 

And as for richer: Someone's always going to make out with new technology. So far it's been Wall Street. 

A personal note:Contact with AI has been, shall we say, less than satisfying. But let's keep an open mind, all of us. Maybe things will get better.

But before we have the chance to evaluate that, let's get through the fall.

Meanwhile, no matter how all this plays out, summer is drawing to a close, school has either begun or is about to start up. Autumn leaves - still a ways away - are preparing to turn those lovely colors.

And, of course, the US Open initial matches begin this week, the NFL season is about to spill onto us, the NHL and the NBA will - in some weeks, begin their seasons and - Major League Baseball will wind up the regular season and head into the playoffs, culminating with the World Series.

All of this will play out even as the market and the economy play out.

So much for summer doldrums, right?