#PowellWatch

Jerome Powell has an ideal platform on Friday to send a clear signal that the Federal Reserve will soon resume interest rate cuts.

However, the economy does not provide the same clear signals that now is the time.

The Fed president's annual speech in Jackson Hole, Wyoming, could be an opportunity to signal a shift in monetary policy.

Powell used it for that purpose last year and, shortly after, announced a large cut.

President Donald Trump pressured him to repeat that achievement. The problem is that key economic indicators do not all point in that direction.

A few weeks ago, when the latest jobs report revealed a decline in hiring, the argument for an interest rate cut seemed definitive.

Then there was the sharpest rise in wholesale prices in the U.S. in three years, which triggered concerns about tariff-induced inflation, which has kept Fed bankers on hold all year.

Last month, Powell described the labor market as solid and monetary policy as well-planned.

Investors will be paying close attention to any changes, no matter how small, in either of these two areas, as it could open the door for an interest rate cut at the next Fed meeting, on September 16 and 17.

However, given that there will be more economic data released before that date, it is likely that the Fed president would prefer to keep his message cautious and ambiguous.

“While I expect him to generally lean towards an interest rate cut at the next meeting, I think he will condition that on a very data-dependent message,” said Jonathan Pingle, chief economist for the U.S. at UBS Securities. “I don't think he will confirm that.”

This will be the last speech he delivers at the annual symposium before his term as president ends next month in May, and the context is one of the most turbulent.