Federal Reserve Chair Jerome Powell has signaled a likely interest rate cut in September, sparking optimism in the stock market. However, traders may be overly enthusiastic about the extent of future rate reductions. While the Fed is preparing to lower rates without facing a major economic crisis, the pace and magnitude of cuts are likely to be more modest than market expectations suggest. The economy and inflation are not weakening rapidly, and a soft landing scenario may not warrant aggressive rate reductions. Investors should temper their expectations, as the Fed remains cautious about balancing economic growth with inflation control.