Alongside the rest of the world, Trump is likely to pay close attention to Powell’s speech, expected to begin at 10 a.m. ET.
When U.S. Federal Reserve Chair Jerome Powell takes the stage at the annual symposium hosted by the Kansas City Federal Reserve at Jackson Hole, Wyoming, on Friday, it will almost certainly be the last keynote address by the banker since his appointment by Trump in 2017.
Markets expect dovish commentary from Powell, pointing toward a possible rate cut in September. According to the CME Group’s FedWatch tool, over 70% of traders have priced in a 25 basis point interest rate cut at the next meeting of the Federal Open Market Committee. However, bets on no changes to interest rates have also grown over the past two weeks.
Powell and other policymakers are facing immense pressure from U.S. President Donald Trump, who has repeatedly asked for a significant rate cut. At the same time, central bank officials have stressed the importance of Fed independence. Most analysts, such as JPMorgan and Goldman Sachs, expect a total of 75 basis points cuts for the remainder of the year.
In previous sessions, Powell has spoken about a wide range of issues, including driving up employment during the COVID-19 pandemic, as well as the subsequent battle to tame inflation. Following last year’s speech, the Fed delivered a 50-basis-point rate cut in September and two subsequent 25-basis-point cuts for the remainder of the year.
“We do not expect Powell to decisively signal a September cut, but the speech should make it clear to markets that he is likely to support one,” Goldman Sachs economist David Mericle said in a note, according to a CNBC report.
Retail sentiment on Stocktwits about SPDR S&P 500 ETF Trust (SPY) was in the ‘bullish’ territory at the time of writing, while traders were ‘bearish’ about the Invesco QQQ Trust Series 1, which tracks the NASDAQ 100.
The U.S. central bank has so far taken a cautious stance on benchmark interest rates due to the uncertainty around President Donald Trump’s tariff policies.
While inflation has come down from pandemic-era levels, it remains above the central bank’s 2% mandate. The U.S. consumer price index (CPI) rose 2.7% annually in July, with core CPI rising 0.3% sequentially, the highest increase since January.
The weak jobs data in July, as well as major revisions for June and May figures, have further complicated the choices before the Fed.
Alongside the rest of the world, Trump is likely to pay close attention to Powell’s speech, expected to begin at 10 a.m. ET. According to Trump’s official schedule, the President is set to make a public announcement at the Oval Office on Friday.
Trump and his allies have recently attacked Fed Governor Lisa Cook over an alleged mortgage fraud, which she has denied. According to a Wall Street Journal report, Trump told aides that he was considering firing Cook unless she resigned from her position.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<