#PowellWatch The eyes of all investors will be on this Friday's Jackson Hole meeting where the Chairman of the Federal Reserve (FED), Jerome Powell, will face his last test after a tumultuous term. He should take a critical rather than tactical stance, according to Mohamed El-Erian on Yahoo Finance.

His best approach would be to focus on general strategic issues, draw lessons from his tumultuous term, and lay the groundwork for the periodic review of the Fed's Monetary Policy Framework. However, this approach would go against his usual preference for a tactical and data-driven stance, which could today exacerbate the challenges he and the institution he leads face. These challenges are significant and complex. For four years, inflation has persistently exceeded the FED's 2% target, and recent data suggests it may be rising even further. At the same time, growing evidence indicates a weakening labor market, which directly undermines the second pillar of the FED's dual mandate. Beyond these economic signals, Powell and the FED face increasing political pressure that could undermine the vital political independence of the world's most powerful central bank. In addition to these issues, his communication style has often been perceived as confusing and perplexing, which has amplified market volatility rather than containing it. The recent dissent among the two FED governors (the first in over 30 years) shows that Powell now leads a clearly divided monetary policy committee. Furthermore, newly appointed governor, Dr. Stephen Miran, is expected to be very critical of both the institution's recent actions and Powell's leadership.