Those who follow markets and policy were all anticipating the speech at the Jackson Hole gathering of Fed officials and economists of Fed Chair Jay Powell. The speech was short and to the point: inflation remains the central banks number one concern, and action to bring inflation down is the focus of Fed policy.

The Chair made several key points; perhaps the most important was a reaffirmation that the Fed should not prematurely stop raising rates and that the Fed will keep at rate increases “until the job is done.”

This is likely the last major policy speech Chair Powell will give before the FOMC meets again on September 20/21. As Chair Powell has been consistent at telegraphing policy and not surprising markets and in my view that was his aim again today. Markets should expect an extended period of higher rates until there is convincing evidence that inflation has been contained.

As he did after the FOMC rate action in July, Powell reiterated his view that rate decision will be data driven, and there is more data to come out prior to the September meeting. However, again telegraphing policy, the only question for FOMC members is whether the increase will be 75 or 50 bps.

Funding the government

While most of Congress and senior government officials are on Augu...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free