Analysis of the Jackson Hole meeting situation: The Jackson Hole Economic Symposium is an annual economic conference hosted by the Kansas City Fed, and the 2025 meeting will be held from August 21 to 23 in Jackson Hole, Wyoming, with the theme 'Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Implications'. This theme focuses on the structural changes in the labor market, including demographics, productivity, and macroeconomic impacts. The conference typically attracts global economists, financial market participants, scholars, government representatives, and media, aiming to discuss long-term policy issues. The key focus of the meeting is Federal Reserve Chairman Jerome Powell.
1️⃣ Jerome Powell will deliver a keynote speech on August 22 (Friday). This will be the most significant monetary policy event of the summer, and investors are highly focused on it, as Powell's past speeches at this meeting often influence market expectations. For example, in 2022, Powell emphasized the determination to combat inflation at Jackson Hole, leading to market volatility. Currently, the market is cautious about Powell's speech, as recent inflation data (such as the July PPI exceeding expectations) may lead him to downplay the possibility of a rate cut in September, instead emphasizing the 'higher-for-longer' interest rate policy to control inflation. Analysts warn that if Powell adopts a hawkish stance, the stock market and risk assets could decline by 7-15%. In the lead-up to the meeting, both the crypto and traditional markets have experienced pullbacks, reflecting that investors are adjusting their positions.
2️⃣ Overall, the meeting has not yet officially started (current date is August 20), but the market has already fluctuated due to expectations. If Powell hints that a slowdown in the labor market supports easing policies, it may boost risk assets; conversely, if he emphasizes inflation risks, the market may further pull back.
3️⃣ Analysis of the probability of a Federal Reserve rate cut in September: According to the latest data from the CME FedWatch Tool, the market estimates the probability of the Federal Reserve cutting rates at the FOMC meeting on September 16-17 to be 80-95%, with a 25 basis points (bps) rate cut probability around 80-86%. The probability of a 50 bps rate cut is lower (approximately 15-26%), while the probability of maintaining the current interest rate is about 15-20%. This probability has fluctuated slightly over the past week, previously reaching over 90%, but due to the July Producer Price Index (PPI) exceeding expectations and rising import prices, some traders have lowered their aggressive rate cut expectations. Nevertheless, the overall market still leans towards the belief that the Federal Reserve will begin a loosening cycle to support economic growth and the labor market.
Cryptocurrency market analysis: In August 2025, the overall trend of the cryptocurrency market is fluctuating upwards, but a recent pullback has occurred due to uncertainty ahead of the Jackson Hole meeting. Bitcoin (BTC) fell back after reaching a historic high of $120,000 last week, currently hovering in the $114,000-$115,000 range, down about 3-5%, mainly influenced by profit-taking and macroeconomic concerns. Ethereum (ETH) similarly retreated to around $4,200, down about 3-5%, but is close to its historical peak. Other mainstream coins such as Solana (SOL), XRP, and Dogecoin (DOGE) also experienced a 1-5% pullback, leading to a shrinkage in the overall market capitalization, with over $500 million in long positions liquidated in the last 24 hours.
The cryptocurrency market is highly sensitive to Federal Reserve policies: interest rate cuts generally benefit risk assets and drive prices up; if Powell is hawkish, it may exacerbate the pullback in the short term. However, overall sentiment remains greedy (Fear & Greed index around 56), with traders accumulating buy orders in the $110,000-$111,000 range, indicating potential rebound.
