Investors Await Powell’s Jackson Hole Speech for Rate Cut Clues
Federal Reserve Chair Jerome Powell's upcoming speech at Jackson Hole has markets bracing for volatility. Traders currently price in a 70% chance of a September rate cut, despite recent hawkish signals from other Fed officials. The options market shows heavy positioning for 75bps of total easing by year-end.
"Powell won't lock in a September cut path, but may hint data supports consideration," says Glenmede's Jason Pride. Mischler's Tom di Galoma warns of potential hawkish surprises: "The chair may show no inclination to lower rates."
Shorter-term yields could spike if Powell resists market expectations, triggering unwinds of Leveraged rate bets. The speech comes amid choppy economic reports that have left policy outlooks uncertain.