Powell in Jackson Hole: Markets Look for Clues on Rate Cut
Fed Chairman Jerome Powell is scheduled to deliver a speech titled "Economic Outlook and Framework Review" in Jackson Hole on Friday at 14:00 GMT (21:00 WIB). Markets will scrutinize every word to gauge the direction of future monetary policy.
The main focus will be the timing of the first interest rate cut this year, along with the scope and pace of subsequent cuts. His remarks are expected to trigger high volatility in the US dollar (USD).
At the July meeting, the Fed held its benchmark interest rate at 4.25%–4.50%. Two governors—Christopher Waller and Michelle Bowman—dissented in favor of a 25 bps cut. Waller called the rate a one-time price shock that could be "ignored" if inflation expectations were maintained, while Bowman argued that growth was slowing and the labor market was less dynamic, allowing policy to begin moving toward neutrality.
July employment data reinforced expectations of a cut in September: Nonfarm payrolls rose by 73,000, while May and June were revised down by 125,000 and 133,000, respectively. This signals an easing in labor market conditions.
However, the latest CPI and PPI indicate that inflation remains "sticky," limiting the scope for aggressive easing in 2025. The bottom line: Powell's tone—hawkish or dovish—will be the primary compass for the USD's direction and the trajectory of interest rates in the coming months. (ayu)
Source: Newsmaker.id
