To The Moon

Jackson Hole Preview: Powell's Moment to Steer Markets

Global investors are once again turning their attention to the mountain resort of Jackson Hole, Wyoming, where the Kansas City Fed's annual Economic Policy Symposium will convene later this week from August 21–23. At the center of the event will be Fed Chair Jerome Powell, who is scheduled to deliver his keynote address on Thursday, August 22 at 10:00 a.m. ET.

For Wall Street, few gatherings outside of scheduled FOMC meetings carry as much weight as Jackson Hole. Over the years, the symposium has become a stage where central bankers float pivotal ideas, often signaling shifts in strategy that ripple across global markets.

Why Jackson Hole Matters

History shows that central bankers often use this platform to send decisive policy signals, with Fed Chairs in particular leaving a lasting imprint on markets.

~In 2022, Powell's terse nine-minute speech sent shockwaves through Wall Street, triggering a broad selloff that saw the S&P 500, Dow, and Nasdaq tumble 3–4% in a single session.

~In 2023, turbulence arrived even earlier, with the Dow logging its steepest one-day drop in five months and the Nasdaq sliding nearly 2% on the eve of Powell's remarks.

~In 2024, the tone flipped: Powell hinted at the most aggressive dovish pivot of his tenure, sending the S&P up more than 1% on the day. By September, the Fed followed through with a surprise 50-basis-point cut, formally launching its easing cycle.

With the exception of the 2022 episode, Jackson Hole has historically acted as a supportive tailwind for U.S. equities rather than a headwind.

Will Powell Set the Stage for a September Cut?

Market pricing leaves little doubt: investors now view a 25-basis-point cut in September as virtually locked in, with at least one more reduction likely before year-end.

Yet expectations for Powell's speech are far from uniform. Analysts broadly agree he will avoid making any binding commitments, instead stressing that the September 17 FOMC decision will hinge on incoming data—particularly evidence of a cooling labor market and sustained disinflation.

Wall Street remains split on the tone Powell will strike. Nomura expects him to tread carefully with a neutral message, designed to avoid feeding premature bets. Bank of America argues Powell may tilt hawkish, signaling unease with the market's aggressive easing expectations. Morgan Stanley, meanwhile, anticipates emphasis on lingering inflation risks, tempering dovish speculation. As always with Jackson Hole, markets may end up parsing Powell's silences as closely as his words.

Beyond the immediate rate outlook, Powell is also expected to offer insight into the Fed's ongoing policy framework review. This year's review could mark a partial retreat from the 2019 reforms, shifting toward a framework more attuned to today's inflationary and labor market dynamics.

Specifically, analysts suggest the Fed may:

~Move away from its "flexible average inflation targeting" approach.

~Reassert that a tight labor market can itself fuel inflationary pressures.

~Place greater emphasis on the risks posed by persistent supply-driven inflation shocks.

If so, the review would represent not just a technical adjustment, but a recalibration of how the Fed balances growth and price stability.

What Comes Next

Once Jackson Hole concludes, all eyes will pivot quickly to the August nonfarm payrolls report on September 5. The jobs data could be the final piece of evidence guiding the Fed's September decision. Some traders are even wagering on the possibility of a larger 50-basis-point cut, though after last week's hotter-than-expected PPI print, such an outsized move appears far less likely.

The memory of past Jackson Hole surprises looms large, and Powell's words have the power to shift expectations in a matter of minutes. Whether he underscores progress or urges caution, his Thursday speech is poised to be the defining moment of the summer for global investors—one that could set the tone for U.S. monetary policy into the fall.

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