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Global markets are closely watching Federal Reserve Chair Jerome Powell’s keynote at the Jackson Hole symposium on Friday; Key points for investors
US Federal Reserve Chair Jerome Powell. (Photo Credit: AP)
Jerome Powell’s Jackson Hole Speech: Global markets are closely watching Federal Reserve Chair Jerome Powell’s keynote at the Jackson Hole symposium on Friday, with investors hoping for clues on whether the Fed will signal a rate cut at its September meeting. The event, running from August 21–23, marks Powell’s eighth and final Jackson Hole address, as his term ends in May 2026.
Fed at a Crossroads
Minutes of the July FOMC meeting showed that most policymakers preferred holding the federal funds rate steady at 4.25–4.50%, citing persistent inflation risks. However, two dissenting voices—Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller—voted for a 25 bps cut, marking the first multiple-governor dissent since 1993.
The majority argued that tariffs under President Donald Trump’s policies could worsen inflation. The Fed continues to walk a tightrope on its dual mandate of price stability and maximum employment.
Mixed Economic Signals
Inflation data remains elevated but stable. July CPI came in at 2.7%, slightly below expectations, while the Fed’s preferred gauge, PCE inflation, rose 2.6% in June after 2.4% in May. July PCE data will be released on August 29.
The labor market, however, is showing signs of stress. US nonfarm payrolls rose by just 73,000 in July—the weakest in nearly five years—following downward revisions to May and June that cut 258,000 jobs. Analysts believe these figures strengthen the case for easing policy.
Experts Divided
Chris Zaccarelli, CIO of Northlight Asset Management, noted that the Fed delayed cuts in July due to inflation worries, but said the real test lies in “how they weigh the risks at the next meeting.” He expects Powell to stress data dependence and keep his guidance guarded.
Dr. Joseph Thomas of Emkay Wealth Management pointed out that while headline inflation is steady at 2.7%, core inflation at 3.1% remains a concern, and tariff impacts could worsen price pressures. He suggested the Fed may not cut unless growth slows sharply.
Kotak Mahindra AMC’s CIO–Debt, Deepak Agrawal, said markets are pricing in an 80% probability of a 25 bps cut in September. He added that a larger 50 bps move is unlikely, as the Fed will aim to maintain credibility and avoid unnecessary volatility.
Markets Eye September FOMC
Investors see Powell’s Jackson Hole remarks as pivotal. A focus on labor market weakness could reinforce expectations of a September cut, while a hawkish stance would underscore inflation as the priority. The Fed’s next meeting on September 16–17 will be decisive, with incoming jobs and inflation data likely to guide the outcome.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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