Odd Lots Lots More on What Just Happened With the Fed at Jackson Hole
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Aug 22, 2025 Michael McKee, Bloomberg TV's economics correspondent and a seasoned attendee of Jackson Hole meetings, breaks down the recent Fed speech by Jerome Powell, which surprised markets with hints of a rate cut. He discusses Powell's focus on labor market risks versus inflation concerns. McKee also reflects on how Jackson Hole has evolved over the years and speculates on potential candidates to succeed Powell. The conversation brings a mix of serious economic insights and personal anecdotes from the iconic symposium.
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Powell Opened The Door To A Cut
- Jerome Powell surprised markets by effectively opening the door to a September rate cut despite prior expectations otherwise.
- That shift makes it harder for the Fed to reverse course if incoming data reverts toward higher inflation or stronger jobs.
Tariffs Seen As One-Time Price Shocks
- The Fed expects tariffs and recent price impulses to raise inflation sector-by-sector as one-time price level shifts rather than sustained, broad-based inflation.
- Powell and some Fed officials view those effects as slow, partial, and not necessarily indicative of persistent inflationary momentum.
Powell Avoided Direct Independence Debate
- The Fed opted not to dwell on political threats to central-bank independence in Powell's speech, focusing instead on policy mechanics and the new framework.
- Officials expect debates about independence to surface in other venues rather than in this Jackson Hole address.