💬Speeches in Jackson Hole can sometimes have a significant impact on yields.
Will today be the same?
In the evening, the market is waiting for signals from Jerome Powell that could determine the fate of the summer rally (14:00 UTC). Investors have already priced in a 75% probability of an interest rate cut by the Fed in September and at least one more by the end of the year. However, the Fed insists that it wants more data. But the data is not helping them. Economic indicators are strong, the labor market is still holding up, and they are only waiting for clarity on inflation, which is still lacking.
Analysts believe that if Powell refrains from quick easing, there could be a sharp repricing of bond yields and a decline in risk assets. The market remembers 2022, when his speech abruptly cut off the rally.😬
As for the S&P 500, if the index holds above 6150, it will look like another small decline within the bullish trend. Below that is a signal for more serious weakness (McMillan).
Trump attacks the Fed for its "slowness" and openly calls for interest rate cuts. But his attempts to manage the process only add chaos. 🤯