The markets will eagerly await comments Friday morning from Fed Chair Powell at the Fed’s annual symposium at Jackson Hole, Wyoming. With inflation falling from 40-year highs but still well above the Fed’s 2% target, Powell’s speech at the annual conference of global central bankers will come at what he has called the most difficult stage of the inflation fight: deciding how much more policy tightening is needed.
With inflation cooling but with the labor market still relatively strong, disagreement among Fed policymakers is emerging over how much more tightening is needed. Fed Chair Powell on Friday may outline how the Fed will assess whether interest rates should go higher and determine when it’s time to start lowering them. Former Fed Vice Chair Kohn said, “He will caution against easing too soon, and it would actually be helpful if he spells out what he means by data-dependence, tamping down the very strong reaction of markets to each piece of data.”
