Powell Heads to Jackson Hole for Final Speech as Fed Chair - Markets Brace for Impact

Jerome Powell makes his final pilgrimage to the Wyoming mountains—one last chance to move markets with his signature monetary poetry.

The Fed's Grand Finale

Central bankers gather at Jackson Hole like clockwork every August. This time carries extra weight—Powell's swan song before handing over the monetary reins. No new economic data expected, just pure Fed-speak theater.

Market Whisperer's Last Dance

Traders hang on every syllable when Powell speaks. His past Jackson Hole addresses triggered everything from crypto rallies to treasury selloffs. This final performance could set the tone for his successor's entire term.

Legacy in the Balance

Powell navigated pandemic collapses, inflation surges, and banking crises—all while maintaining that stoic Fed chairman poker face. His last speech might finally reveal what he really thinks about the financial circus he's presided over.

Wall Street will parse his words like ancient scripture while Main Street wonders why bankers need a mountain retreat to say what could fit in a tweet—but that's modern finance for you.

Powell backed hikes in 2018 and reversed course in 2019

Powell’s first Jackson Hole speech in 2018 was his longest. He laid out his policy framework using the phrase “navigating by the stars,” which referred to the neutral interest rate and natural unemployment level. But his real point was about balance.

“I see the current path of gradually raising interest rates as the FOMC’s approach to taking seriously both of these risks,” Powell said, referring to the risk of overdoing or underdoing tightening. The Federal Reserve raised interest rates twice after that speech, following two hikes earlier that year.

In 2019, Powell’s tone changed. The U.S. was DEEP into Trump’s first trade war, and the global economy was feeling it. Powell brought that issue directly into his speech, saying, “We have been monitoring three factors that are weighing on this favorable outlook: slowing global growth, trade policy uncertainty, and muted inflation.” Within hours of that comment, Trump posted on social media: “Who is our bigger enemy, Powell or Xi?” The Fed responded that year with two more rate cuts, following one in July. Then came COVID, and everything changed.

Powell leaned on jobs in 2020, misjudged inflation in 2021

In 2020, Powell addressed the conference remotely because of the pandemic. This time, he introduced a new policy framework, focused more heavily on jobs. “Our revised statement emphasizes that maximum employment is a broad-based and inclusive goal,” he said.

“Following periods when inflation has been running below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.”

In September that year, the Federal Reserve adopted a new test for future rate hikes: the economy needed to reach maximum employment and 2% inflation, with signs inflation WOULD hold above that level.

But in 2021, Powell misread inflation. He again appeared virtually and dismissed the price spike as temporary. “Current high inflation readings are likely to prove transitory,” he said.

The Federal Reserve slowed its asset purchases in November but kept the interest rate NEAR zero until March 2022. That delay was later blamed by both critics and Fed officials for allowing inflation to grow worse.

Powell warned of pain in 2022 and opened the door to cuts in 2024

In 2022, Powell returned to the Jackson Hole podium in person and kept his comments short. “Restoring price stability will likely require maintaining a restrictive policy stance for some time,” he said. That year, the Fed followed his speech with two more massive 75-basis-point hikes and then switched to smaller increases until rates reached 5.25%-5.50% by July 2023.

In 2023, Powell’s tone was different but still cautious. “We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data,” he said. He didn’t commit to more hikes but left the option open. The Federal Reserve kept the rate steady at 5.25%-5.50% through the year.

By 2024, Powell said the risks had flipped. Inflation was cooling, but job numbers were starting to look weak. “My confidence has grown that inflation is on a sustainable path back to 2%,” he said. “We do not seek or welcome further cooling in labor market conditions… The time has come for policy to adjust.”

That adjustment came fast. In September, the Fed ended its year-long pause with a half-point rate cut. It followed with two more quarter-point cuts to close the year.

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