Andrew here. Today is the day: Jay Powell, the Fed chair, will speak in Jackson Hole, Wyo., laying out how he views the economy and how the central bank should approach it. Amid President Trump’s continued criticism of Powell, the speech takes on an even greater significance.
My colleague, Bernhard Warner, walks through the big issues we are likely to hear Powell address. Also, we take a look at the rise of stablecoins, as well as have some fun A.I. hacks for you from a C.E.O. And a quick programming note: We’ll be off next week, from Monday, so please have a great final week of August and we’ll see you in your inbox on Sept. 2, after Labor Day.
What will Jay say?
If Jay Powell’s past speeches at the Jackson Hole Economic Symposium tell us anything, it’s that the Fed chief is not shy about making big policy news at the central banker confab.
With investors and business leaders growing spooked about inflation, tariffs and President Trump’s attacks on the Fed, Friday’s address — likely Powell’s last as chair — should be no different.
Wall Street will be closely watching for clues about what he thinks about rates; whether he’ll stand up for the institution’s independence; and what he’ll say about Lisa Cook, the Fed governor whom Trump has pushed to resign over unconfirmed mortgage-fraud allegations. The matter appeared to escalate on Thursday after the Justice Department informed Powell of a possible investigation into Cook.
Three I’s could loom large:
-
Interest rates: Trump again this week badgered Powell (with insults) to lower borrowing costs. This time, thanks to a deteriorating labor market, Powell could signal he agrees. The futures market on Friday was penciling in a 75 percent chance of a September cut, down from roughly 95 percent at the beginning of August.
-
Inflation: The Fed is divided about the inflationary effects of Trump’s tariffs, while companies like Walmart have warned that they’re getting squeezed. Inflation remains well above the Fed’s 2 percent target. Would Powell and his fellow rate-setters risk cutting now?
-
Independence: Despite the barrage of abuse from Trump, Powell has stayed nonconfrontational. Expect that to continue, commentators say. But don’t be surprised if he speaks up on Friday. “I think he may try to make a valedictory type of speech in terms of the importance of that independence,” David Seif, an economist at Nomura, told DealBook. That could reassure antsy global investors, he added.
Fed chiefs have long been in the firing line. Paul Volcker wrote in his memoir about meeting President Ronald Reagan and James Baker, the White House chief of staff, in 1984. Volcker was “stunned,” he wrote, when Baker directly ordered him not to raise rates.
Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.
Thank you for your patience while we verify access.
Already a subscriber? Log in.
Want all of The Times? Subscribe.
The post Powell Takes Center Stage, With Wall Street and Washington Watching appeared first on New York Times.
