The upcoming speech by Powell in Jackson Hole raises speculation about the Fed's plans for rate cuts
According to BlockBeats, the chair of the U.S. Federal Reserve, Jerome Powell, is set to deliver a speech on economic forecasts and Fed policy at the annual central bank meeting in Kansas City, Wyoming, on August 22 at 10:00 AM Eastern Time (22:00 UTC+8). Major investment banks have shared their expectations regarding Powell's speech.
State Street Global Advisors forecasts that Powell may pave the way for interest rate cuts starting in September and continuing through the end of the year. UBS suggests that, based on last week's data, Powell may indicate a preference for rate cuts in September.
Russell Investments believes that the meeting in Jackson Hole may temper expectations for a Fed rate cut, suggesting that a cut in September is 'possible' rather than 'certain', with a likely reduction of 25 basis points instead of 50.
ING notes that recent concerns expressed by three Fed officials — Daly, Cook, and Kashkari — regarding the deterioration of the labor market may signal a shift towards a more dovish stance at the meeting in Jackson Hole.
MUFG emphasizes the risk that Powell may not provide a clear signal regarding the timing of the next rate cut, allowing the Fed more time to assess future data ahead of the September FOMC meeting. This could help alleviate short-term pressure on the U.S. dollar.
Bank of America remains skeptical about rate cuts this year, noting that Powell expressed satisfaction in July regarding low job growth while the unemployment rate remains in a narrow range. This scenario seems to be unfolding, and Powell's speech at the Jackson Hole meeting will provide him an opportunity to align his words with actions.
