Wall Street is banking that Powell will signal a rate cut at Jackson Hole—but the closer it gets, the less likely it looks

Jerome Powell, chairman of the US Federal Reserve, at the Jackson Hole economic symposium in Moran, Wyoming, US, on Friday, Aug. 25, 2023. (Credit: David Paul Morris—Bloomberg/Getty Images)

• Markets had been nearly certain the Fed would cut rates in September, but fresh producer price data are weakening those odds ahead of Chair Jerome Powell’s Jackson Hole speech. While investors still see an 85% chance of a cut, Bank of America now expects rates to hold, warning tariffs and sticky inflation could keep policy tighter for longer. Analysts will be eyeing the back end of this week for the market-moving news.

Analysts have long priced in a number of cuts to the base rate in 2025. With just a handful of meetings left to go this year, September has been widely identified as the month when the interest rate will finally be reduced.