Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole conference on Friday will provide crucial insights into the central bank’s stance on interest rate cuts. Wall Street overwhelmingly expects a September rate cut, but some analysts question whether Powell will confirm this plan.
Last year, Powell signaled a pivot to rate cuts, citing a sustainable path for inflation back to 2%. However, with inflation remaining above the Fed’s target and tariffs exerting upward pressure on prices, the likelihood of a rate cut is uncertain.
Some economists believe that deteriorating jobs data may indicate weak demand rather than supply. If this is the case, rate cuts would worsen inflation, making it more challenging for policymakers to tease out one-off effects from longer-lasting pressures.
Powell’s speech will be closely watched, but some analysts expect him to remain cautious. Ed Yardeni predicts that Powell will keep his cards close to his vest and avoid making a clear commitment to a September rate cut. The Jackson Hole event has traditionally served as an opportunity for policymakers to hint at forthcoming rate moves.
Wall Street has extensively priced in a September rate cut, but any sign of delay could be a severe disappointment. Economists are divided on the issue, with some expecting Powell to confirm market pricing and others doubting his ability to guide toward easing.
Source: https://fortune.com/2025/08/17/jerome-powell-jackson-hole-speech-preview-fed-rate-cuts-tariffs-inflation-jobs