Federal Reserve Chairman Jerome Powell will deliver a closely watched speech on Friday at 5:00 PM during the annual central bank gathering in Jackson Hole, Wyoming, an event that has historically set the tone for monetary policy for the coming year.
This year's statements come at a pivotal moment, as policymakers weigh the first potential interest rate cut in 2025 after more than a year of keeping borrowing costs steady to assess the impact of tariffs and high price pressures.
For months, President Donald Trump has intensified public pressure on the Federal Reserve to cut interest rates, arguing that reductions would stimulate economic growth and reduce interest costs on government debt. His campaign escalated further this week when he called for the resignation of Federal Reserve Governor Lisa Cook after a Trump administration official accused her of mortgage fraud.
However, the central bank has so far resisted political demands, maintaining the federal funds rate in a target range of 4.25% to 4.5%, levels that remain close to the highest in two decades following the sharp tightening cycle that followed pandemic-era inflation.
A few weeks ago, traders were almost unanimous in expecting a rate cut at the September meeting, but that conviction has faded since then.
Futures pricing now indicates less than a 70% chance of a 25 basis point cut, making Powell's comments on Friday more important for shaping expectations.
For expectations.