Federal Reserve Chairman Jerome Powell's upcoming speech at the Jackson Hole symposium is highly anticipated, as it is expected to clarify the Fed's strategy regarding future interest rate cuts.
Market participants are particularly keen on any indications from Powell about the extent of the anticipated interest rate reductions starting in September, given the market's pricing of increased probability for a 25 basis point cut.
If Powell adopts a more dovish tone during his address, it could weaken the dollar and further reduce US Treasury yields, amidst rising recession fears.
The most likely scenario is that Powell maintains a balanced approach to his communication, using the speech to prepare markets for a potential rate cut in September.
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