As Wall Street awaits Friday’s speech from Federal Reserve Chair Jerome Powell, traders are bracing for potential turbulence. It’s his last keynote at the Jackson Hole Economic Symposium, and such addresses have a track record of moving markets—typically triggering a rise in the 10-year Treasury yield (by around 21 basis points), boosting the dollar (~1.4%), and denting the S&P 500 (down nearly 2%) in the weeks that follow.
At present, markets are heavily betting on a 25-basis-point rate cut in mid-September, with additional easing expected later this year—reflected in pricing showing about an 85% chance of cuts. But all bets hinge on Powell’s remarks. Should he emphasize caution and a need for more incoming data, traders could experience a bumpy ride
Despite inflation trending higher than the Fed target and unemployment steady at 4.2%, this year’s symposium theme—“Labor Markets in Transition,” touching on demographics, productivity, and macroeconomic policy—puts the spotlight firmly on workforce dynamics. Navigating this delicate terrain, Powell may aim to craft a legacy-defining moment—a speech that balances optimism with prudence, especially amid political pressure to deliver rate cuts.
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