Powell's Last Jackson Hole Speech Could Be a Big 1
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Powell delivered the guidance in a highly anticipated speech on Friday at the central bank's annual symposium in Jackson Hole, WY.
Now that Federal Reserve Chair Jerome Powell has signaled that the central bank could soon cut its key interest rate, he faces a new challenge: how to do it without seeming to cave to the White House’s demands.
Minutes after the speech, investors pegged the chances of a quarter-point interest rate cut at 91%, up from a 75% chance assessed one day earlier, according to CME FedWatch Tool, a measure of market sentiment. Despite the market's positive reaction to Powell's speech, the Fed chair voiced a note of caution for the outlook for the U.S. economy.
If inflation starts climbing again after a rate cut, “the Fed will have to reverse course — and in the worst case, start hiking again,” Slok said.