The annual Jackson Hole gathering closed with what may prove to be Jerome Powell’s last major act before the Federal Reserve’s September meeting — and while the chair resisted committing to a rate cut, markets are convinced the groundwork has been laid.
Powell struck a characteristically cautious note, stressing that the Fed still has jobs and inflation data to digest before mid-September. Yet the message was clear: the door to easing is open, and expectations for a cut are firmly in play.
Nigel Green, chief executive of global financial advisory group deVere, said Powell had “done what central bankers do best — he kept the door open,” adding: “The Fed is already behind the curve, and the balance of risks is shifting toward easing sooner rather than later.”
The Fed has not reduced interest rates since December, but economic signals are flashing red. Growth is softening, the labour market is showing early signs of stress, and tariffs imposed by President Donald Trump are pushing up costs throughout supply chains.
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