Powell Signals Possible September Rate Move

As the Jackson Hole conference nears, Powell faces inflation pressures from tariffs that complicate the Fed's next move.

Powell Faces Uncertain Path at Jackson Hole as Tariffs Cloud Policy

All eyes will be on Federal Reserve Chair Jerome Powell on Friday at the Jackson Hole conference in Wyoming. The speech comes as markets expect a possible rate cut in September, a move many traders have priced in for months. Tariffs tied to trade policy are pushing up prices for some goods, adding a layer of complexity to the Fed's inflation fight while testing its patience for a data driven path. The event is historically a testing ground for signals about future policy.

Analysts are split on the likely signal. Some say inflation remains above the 2% target and a surprise cut could worsen price pressures if supply issues persist. Others argue that softening job data and a data dependent stance could justify a cautious easing path, with Powell emphasizing that policy is guided by incoming information rather than a fixed timetable.

Powell faces a delicate balance between supporting a cooling labor market and not reigniting inflation. Tariff driven price pressures make it harder to read the inflation picture, so the Fed must weigh signaling against credibility. If Powell stays tight lipped, markets may read silence as a lack of commitment and react with volatility. The broader risk is a policy misread: too little easing risks a stale economy, too much could push prices higher. The Jackson Hole moment could set the tone for the fall policy path depending on how clearly Powell frames data dependency and risk balance.

Highlights

The coming days will reveal how much room the Fed sees to maneuver.