Federal Reserve Chair Jerome Powell is preparing to address the Jackson Hole Economic Policy Symposium this week.
His remarks are widely expected to emphasize caution and patience on interest rates. While Powell may attempt to push back on the growing anticipation of a rate cut in September, I believe the weight of economic data means markets will continue to expect that move.
The backdrop has shifted dramatically in recent weeks. July payrolls came in at just 73,000, well below consensus estimates.
Perhaps more striking were the revisions: more than 250,000 jobs were erased from the tallies for May and June, leaving those months far weaker than initially thought. The unemployment rate has edged up to 4.2%, a reminder that labour market strength cannot be taken for granted.
Markets reacted instantly. Treasury yields declined across the curve, and futures pricing began to reflect a higher probability of a rate reduction at the Fed’s September meeting.
From my perspective, this represents more than short-term volatility. It reflects the growing view that the Fed has been basing its stance on data that no longer holds.
At the same time, inflation is not re-accelerating. Recent figures have undershot forecasts, easing pressure on policymakers. The Atlanta Fed’s GDPNow tracker points toward slower growth. Taken together—softer inflation, a weaker labour market, and slower growth—these developments give markets ample reason to anticipate easier policy.
Powell’s challenge at Jackson Hole is a familiar one: how to maintain flexibility without unsettling markets. He will likely underscore that the committee is not unanimous, that further data is still to come, and that no decision has yet been made. Yet markets parse every word and every inflection.
A flat rejection of imminent easing could cause a sell-off in risk assets, while a more cautious, open-ended tone may reinforce current expectations of a cut.
This is why it would be unwise to expect Powell to offer clarity in Wyoming.
His instinct will be to hedge. He may stress vigilance and the need to remain “data dependent.” But the data itself is already pointing in a direction that is difficult to ignore.
Overlaying this are political pressures. President Trump has been outspoken in his desire for lower borrowing costs, and Treasury Secretary Scott Bessent has also supported that view. The Fed insists on independence, but perceptions matter. Powell will be speaking against this backdrop, aware that his words will be interpreted through both economic and political lenses.
What does this mean for investors and policymakers? The first adjustment in a policy cycle often sets the tone.
Historically, such moments have prompted significant repositioning in equities, bonds, currencies, and commodities. Growth-oriented sectors such as tech have, in the past, tended to respond positively to lower borrowing costs. Emerging markets have at times benefitted from a softer dollar. Bond markets can experience heightened volatility as expectations shift.
None of this, of course, is guaranteed. Every cycle is unique, and the present one is particularly complex. But the direction of market sentiment appears clear: expectations for a September cut are firmly embedded, whether Powell embraces them or not.
Jackson Hole will be important for gauging tone, not substance. The real test will come at the September 16–17 meeting. By then, policymakers will have one more jobs report and additional inflation data. If those reports confirm the recent trend, the case for a rate cut will become more compelling. If they surprise to the upside, Powell and his colleagues may feel emboldened to wait longer.
In my view, though, the balance of probabilities currently tilts toward action. Labour market softness, disinflation, and slower growth together form a powerful argument for a modest policy adjustment. Powell will not want to give markets a clear green light in Wyoming—but he may not be able to talk them out of expecting one.
This is the delicate balance he faces: preserve optionality, avoid unsettling markets, and retain credibility in the face of shifting data.
It’s a near-impossible communications challenge. But even if his rhetoric buys time, the underlying fundamentals are now doing most of the talking.
Whether or not September delivers a cut, Jackson Hole will shape how investors interpret the road ahead. Powell’s words will be dissected, debated, and repriced in real time. Yet the greater force at work is the data. It is the hard numbers—jobs, inflation, and growth—that will ultimately guide the Fed’s hand.
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London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.
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