Powell speaks at Jackson Hole amid rate-cut pressure

Powell's Jackson Hole speech comes as the White House pushes for rate cuts and questions the Fed's independence.

Powell faces pressure as Fed independence comes under fire

Powell will speak at the Jackson Hole symposium in Wyoming, a moment that could signal how quickly the Fed might move on policy. The event is watched as the White House presses for lower rates and investors look for any hint of a September move. Powell is expected to discuss the economy and the central bank's ongoing balancing act between fighting inflation and keeping jobs strong.

Powell and other policymakers have just completed a five-year review of the Fed's longer-term framework. The central bank has said it will not act preemptively to lift rates when unemployment is low and may tolerate slightly higher prices to support job gains. With inflation still above the 2% goal and the labor market showing signs of cooling, some see a case for caution, while political signals test the bank's independence.

Powell faces a tricky moment. The Fed has to defend its credibility while dealing with political pressure that is unusual in American history. If policy makers lean too hard toward easing, inflation risks could rise and the public may doubt the central bank's independence. Yet patience may also pay off, as weaker job gains and easing price pressures could make a September move more plausible. Jackson Hole becomes a test of whether the Fed can stay steady or buckle under outside pressure.

Highlights

The coming weeks will reveal how much the Fed can protect price stability without sacrificing employment.