In his annual Jackson Hole Symposium speech, Fed Chair Jerome Powell gave the strongest possible indication that the Fed would be cutting it’s interest rates.
The minutes from the Fed’s July meeting, released just two days before the 23rd August speech, hinted at this outcome. In his speech, Powell followed this up and said “the time has come for policy to adjust”.
He used language typical of the Fed to avoid giving exact details on the cuts “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he said. He made clear that he believes inflation is now under control and trending towards the 2% target. He admitted the Fed had misjudged the threat of inflation in 2021 when he, along with many others, felt it would be transitory and would not require a monetary policy response from central banks.
