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The phrase of the day on this fine summer Friday isn't from any of the politicians seeking our attention 24/7 but rather Fed Chairman Jerome Powell. Giving a highly anticipated speech at the annual Fed confab in Jackson Hole, Mr. Powell told us, "The time has come."

While the market expected the Fed Chair to "hint" that the FOMC is about ready to change their tune, Powell choice of words was extremely clear cut, and refreshing to long-time Fed watchers such as myself.

In the old days, it was exceptionally difficult to determine what the Fed was about to do next as the "Fedspeak" was often convoluted and opaque. Analysts went so far as to measure the thickness of Alan Greenspan's briefcase he carried to FOMC meetings in order to improve their odds of understanding what the Fed would or wouldn't do next.

My how times have changed. Today's Fed is all about transparency. Apparently, Fed officials have learned that markets hate uncertainty - and surprises even more. As such, Powell and Company's policy today is to let us know what they are thinking at all times.

Until recently, the thinking was that while the trend of inflation was heading in the right direction, it was still too high, and the jobs market was still quite strong. Thus, our central bankers felt they had time to be patient and wait for the data to improve their "confidence" that inflation was going to eventually hit their target.

However, with the BLS informing us this week that job growth has been overstated by some 818,000 jobs this year (oops), the jobs picture suddenly looks less rosy - as in a lot less rosy. This data point encouraged the bears who continue to claim that all of their trusty recession indicators are not wrong, just a little late this time around.

So, with the labor market, which just so happens to be one of the Fed's two priorities, looking less than stellar, Powell informed us this morning that the time has indeed come for "policy to adjust." In English, this means it's time for the Fed to take their foot off the neck of the economy and start bringing rates back down to more "normal" levels. And fast.

Cutting to the chase, Powell informed anyone listening that the Fed is going to cut rates on September 18th. Which, of course, brings us to the next questions. How much will the Fed Funds be cut? And will the September cut usher in a rate-cutting cycle or be a "one and done" event?

Although Powell offered no guidance whatsoever on the size of the initial cut, he did indicate that an easing cycle appears to be at hand. The Fed Chair said that "while the direction of travel is clear, the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

Powell explained his more dovish stance by saying that the economy is growing at a solid pace, and while upside risks to inflation have diminished, the downside risks to employment have increased. So apparently that massive revision to the country's job growth was indeed a big deal with Powell saying the labor market has cooled considerably.

The upside to this is the jobs market now appears unlikely to be a source of elevated inflationary pressures anytime soon. And this, dear readers, is a good thing.

Powell made it clear that his gang of central bankers does NOT seek or welcome further cooling in labor market conditions. And here's the kicker, Powell emphasized an apparent shift in the Fed's thinking by saying the Fed will do everything it can to support a strong labor market. Nice.

So, with inflation now much closer to the Fed's objective, and inflation expectations remain well anchored, the time has come. And from my seat, it's about time!

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