Jackson Hole Under Pressure: What Will Powell Say Friday — and What Could It Mean for Markets?
Investors are laser-focused on U.S. Federal Reserve Chair Jerome Powell’s speech this Friday at the prestigious Jackson Hole symposium. Markets have been heavily pricing in a September rate cut, but Powell may push back against that optimism and avoid locking himself into a firm commitment.
⸻
🔹 Powell Caught Between Markets & Politics
• Research firm LHMeyer expects Powell to strike a cautious tone to avoid fueling “too much euphoria” over rate cuts.
• Meanwhile, President Donald Trump continues to turn up the pressure, slamming Powell as a “stubborn mule” and “unintelligent” for resisting faster easing.
• Trump recently nominated economist Stephen Miran — an outspoken supporter of aggressive rate cuts — to a vacant Fed seat. Analysts warn Miran could act as Trump’s provocateur inside the FOMC.
⸻
🔹 Fed Divisions + Mixed Data
• At the last meeting, Christopher Waller and Michelle Bowman — both eyed as Powell’s potential successors — voted against cuts, exposing a divided Fed.
• Economic signals remain cloudy:
• Weak July jobs data → hints at a cooling labor market.
• Hotter PPI inflation → tariffs under Trump risk a stagflationary squeeze.
⸻
🔹 Chances of a September Rate Cut
• Barclays’ Marc Giannoni says Powell’s comments on unemployment will be critical. If he argues supply-side forces (like immigration) are keeping job markets strong, even amid weak data, the odds of a September cut could drop closer to 50%.
• After the latest inflation data and hawkish Fed remarks, markets have already pulled back expectations — now pricing the probability of a September cut at ~85%, down from near certainty earlier this month.
⸻
📌 Bottom Line: Powell’s Friday speech is a high-stakes balancing act. Too dovish, and markets may overheat; too hawkish, and investors could panic. Either way, expect heightened volatility across stocks, bonds, and even crypto.
#FederalReserve #Powell #JacksonHole #Markets
