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In his speech at the Federal Reserve Bank of Kansas City's Jackson Hole Economic Symposium, Fed Chair Jerome Powell communicated the central bank's intentions to cut interest rates at its September policy meeting. But what do incoming rate cuts signal about the risks of a recession, especially as some on Wall Street believe a 50-basis-point cut could trigger a recession?

Morgan Stanley Investment Management senior fixed income portfolio manager Vishal Khanduja joins Catalysts to react to Powell's Jackson Hole speech and his outlook on the US economy.

"It's a pretty cliché term, but soft landings are bumpy. Data is not giving you a very clear sign, and I think one big assumption here is also that we are very confident that the Fed has a lot in its toolkit to avoid that sort of hard landing, if you will, or a massive recession," Khanduja says on Fed policy, adding: "So we are not moving into a recessionary time frame where the Fed is actually rushing to cut here. I think they are recalibrating."

While Powell may be able to "declare a victory" at the end of 2024, Khanduja explains what this may mean for fixed-income (^TYX, ^TNX, ^FVX) investing strategies.

Watch Federal Reserve Chair Jerome Powell's full speech here.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Luke Carberry Mogan.