Forward Guidance Will Powell’s Jackson Hole Speech Break Markets? | Weekly Roundup
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Aug 21, 2025 The discussion kicks off with anticipation for Powell's Jackson Hole speech, weighing its potential hawkish or dovish leanings on markets. There's an insightful dive into recent FOMC minutes and the impact of inflation expectations. The hosts tackle the curious decline in foreign participation in Treasury auctions and its implications for investors. They also dissect Trump’s plans regarding the Fed and examine the tug-of-war between recession risks and rising inflation, all while blending in some lighthearted banter.
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Recall: Powell's 2022 Jackson Hole Hawkish Pivot
- The hosts preview Jackson Hole by recalling Powell's 2022 hawkish speech that signalled willingness to tolerate a recession.
- They use that past pivot to frame how Jackson Hole historically flips market expectations.
Jackson Hole Is A Market Pivot Point
- Jackson Hole can trigger big market pivots depending on Powell's tone and framing of September cuts.
- Markets are pricing scenarios from full surrender (dovish) to outright hawkish mic drop, each with distinct bond and equity implications.
Five-Year Review Changes The Fed's Reference Frame
- The Fed's five-year policy review matters because it can rewrite the framework after prolonged years above 2% inflation.
- Powell faces a different regime than 2019's flexible average targeting and must contend with multi-year inflation overshoots.