Powell restores order

Fed Chair Jerome Powell himself said the time has come for the central bank to cut its key policy rate, affirming widely-held expectations that officials will begin lowering borrowing costs next month and making clear his intention to prevent further cooling in the labor market. “The time has come for policy to adjust,” Powell said in a speech during the annual economic conference in Jackson Hole, Wyoming. “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.” His most decisive signal yet that his inflation-fighting mission has been accomplished helped restore order to markets just a few weeks after weaker-than-expected labor data, among other things, triggered a mini-panic. Now the return to calm is creating new riches on Wall Street. The S&P 500 climbed within 1% of an all-time high Friday. Exchange-traded funds tracking Treasuries and corporate bonds shot up. And the VIX index, Wall Street’s fear gauge, settled comfortably below levels denoting nervousness. —David E. Rovella

Getting the Fed’s start date fixed, and having many of the world’s big central banks paddling in the same direction, removes some anxieties for investors. Officials from three of the world’s major central banks on Friday signaled they are firmly on course to lower—or continue lowering—interest rates in the coming months, marking the beginning of the end for an era of high borrowing costs as the global economy slips out of the grip of post-Covid inflation. Still, tremendous uncertainty and risks remain. Neither Powell nor his counterparts offered much guidance on how quickly they intend to proceed in lowering rates over the next several months.

US Vice President Kamala Harris’ nomination acceptance speech Thursday night was a call for a new path forward, to a country where a woman’s job is commander-in-chief, Nia-Malika Henderson writes in Bloomberg Opinion. Over a 40-minute address that unfolded in stories about her career as a prosecutor, inspired both by a close friend’s plight and civil rights legends and in stories about her time in the White House, Harris spoke in a conversational way, Henderson writes. She looked and sounded like an American president, forceful in her defense of democracy and proud of the nation’s ability to inspire the world.

Bank of Japan Governor Kazuo Ueda kept rate hikes in play this year by turning a potentially messy parliamentary hearing into a relatively straightforward reiteration of policy in his first public remarks following a global market rout. “If we are able to confirm a rising certainty that the economy and prices will stay in line with forecasts, there’s no change to our stance that we’ll continue to adjust the degree of easing,” he said. When asked about the turmoil that occurred earlier this month, Ueda played down the significance of the BOJ’s July rate hike, instead citing “overdone” worries over the state of the US economy.

From day one, Starbucks’ incoming Chief Executive Officer Brian Niccol will have more power than his predecessor. Niccol, who is leaving Chipotle Mexican Grill, will become CEO and chairman the moment he joins Starbucks on Sept. 9. By contrast, Laxman Narasimhan spent more than five months as CEO-in-training under company patriarch Howard Schultz and never took on the board chairman position. Only after an intense period of shadowing Schultz did he gain the ability to set the company’s strategy. The vastly different handovers underscore the two executives’ contrasting resumes.

S&P Global Ratings downgraded Kenya’s credit score deeper into junk after the government tossed out controversial tax hikes meant to address fiscal imbalances. The credit assessor downgraded Kenya by a notch to B-, six levels into junk and on par with Egypt and El Salvador. The downgrade follows similar cuts by the other two major rating agencies. “The downgrade reflects our view that Kenya’s medium-term fiscal and debt outlook will deteriorate,” analysts wrote in a report Friday. The Finance Bill, as the tax legislation is known, sparked deadly protests against the proposed levies, which included bread, cooking oil and car ownership.

Washington’s ambassador to Mexico behaved disrespectfully by criticizing the nation’s plans to reform its judiciary, President Andres Manuel Lopez Obrador said after Ambassador Ken Salazar warned that the government’s proposal for judges to be elected is a threat to its democracy. Salazar said drug cartels will find it easier to infiltrate Mexico’s judiciary if a plan to have all judges chosen by popular vote is approved, the core objective of Lopez Obrador’s judicial reform proposal being discussed in congress.

Slowing sales at Topgolf Callaway Brands’ namesake driving ranges and a hefty debt load that threatens to frighten off buyers spurred Raymond James to slash the company’s rating. Analyst Joseph Altobello double downgraded Topgolf Callaway, cutting his recommendation to underperform from outperform, making him just the second analyst among the 14 tracked by Bloomberg to back selling the shares. After notching a 1.6% slide Friday, the stock’s slump for the year deepened to 22%. “Acquisitions have led to a bloated balance sheet,” Altobello said. The company is conducting a strategic review of its Topgolf driving-range chain, including a potential spinoff, but he worries that such a deal might come “too late.”

Journalist and media commentator Jeremy Murphy co-founded the public-relations firm 360bespoke. Before his move into marketing, he spent more than a decade globe-trotting in celebrities’ wake as the editor of Watch magazine. Even today, Murphy logs at least 50,000 miles in the air each year. And almost a decade later, he still recalls treating himself to a flight in Air France’s La Première cabin for his 40th birthday, as it remains his best experience at 30,000 feet. “You cut every line,” he says, noting that the boarding process alone was unforgettable. “In the lounge they say, ‘Mr. Murphy, your plane is ready.’” He told us his secrets.

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