While equities (^DJI, ^IXIC, ^GSPC) experience gains coming off of Federal Reserve Chair Jerome Powell's speech, bond yields (^TYX, ^TNX, ^FVX) are sliding in response to signals that the central bank will begin cutting interest rates in September.

Morgan Stanley Investment Management senior fixed income portfolio manager Vishal Khanduja comes on Catalysts to talk about the latest movements in the bond market in response to the latest Fed commentary. Looking at labor and employment data, Khanduja found the tone of Powell's speech to have "ratified the market pricing."

"If they want to go 50 [basis points], again, they have another set of entire one month worth of data, whether it's the labor market or the inflation to look at," Khanduja says. "But then some undertones in that speech also very clearly pointed out that the focus is on labor market, focus is on the underlying pace... [that cutting will be tied to that labor market versus inflation going forward."

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.