A Brief Summary of Powell's Speech at the Jackson Hole Annual Meeting at 10 AM Today:

Key Point 1: Monetary Policy is at a Crossroads, Short-term May Suggest the Possibility of Rate Cuts

Investors generally expect the Federal Reserve may start lowering rates in September to address economic slowdown and weak employment data, and may choose not to make an early statement, continuing to emphasize a strong reliance on data.

Federal Reserve officials are generally cautious about a rate cut in September, believing that inflation remains high and more clear data is needed to support a reform path.

The market's previous bet on the almost certain probability of a rate cut has been adjusted from nearly 100% down to about 70%-80%, indicating a change in expectations.

Key Point 2: Significant Structural Adjustments to Policy Framework

Powell may announce the abandonment of the 2020 monetary policy framework, returning to a more cautious, balanced approach to inflation and employment targets. This is part of the Federal Reserve's routine policy evaluation every five years.

The new framework aims to enhance the Federal Reserve's flexibility and resilience to respond to future economic shocks.

Underlying Context: The Game of Political Pressure and Policy Independence

This is Powell's final appearance as the Federal Reserve Chair at the Jackson Hole annual meeting. He currently faces dual pressure from the White House and the market, especially under the dual challenges of still high inflation and weakening employment data, making decision-making more difficult.

President Biden and several economists are concerned that the independence of the Federal Reserve is being eroded, and that if board turnover intensifies in the future, it may alter the Federal Reserve's policy direction.