Will Powell play hawk, dove, or keep a poker face?

Federal Reserve Chair Jerome Powell takes the podium in Jackson Hole on Friday with markets tuning in for one of the central bank’s most closely watched signals of the year. His speech comes as investors weigh whether September will bring long-awaited interest rate relief.

The annual Economic Policy Symposium, hosted by the Kansas City (State of Missouri) Fed, has a history of producing market-moving remarks, and Powell’s address carries added intrigue amid speculation that it may be his final appearance as chair at this prestigious venue.

What markets are expecting?

Investors have priced in elevated odds of a September rate cut, with CME FedWatch data showing probabilities above 60 percent. Goldman Sachs economists argue conditions favor a policy shift, while Fed governors remain split on near-term decisions.

The economy has slowed in 2025, with GDP growth dipping to 1.2 percent and inflation still running above the 2 percent target. Yet unemployment continues to hover below 4 percent, complicating the Fed’s trade-off between easing and restraint.

Did you know?
Since 1978, the Jackson Hole symposium has hosted over 70 countries’ central bankers, with more than half of Fed chairs using it to announce new policy directions.

An unusually divided Fed

The July policy meeting exposed rare public dissent, with two governors pushing for an immediate rate cut. That break in unity, not seen since the 1930s, signals how uncertain the outlook has become inside central banking circles.

Powell’s language at Jackson Hole will be scrutinized for whether he sides with caution or with those urging faster action. Observers expect carefully chosen words rather than bold announcements.

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Why Jackson Hole matters

Jackson Hole has long served as the Fed’s stage for signaling broad shifts, from Ben Bernanke hinting at quantitative easing in 2010 to Powell reshaping inflation targeting in 2020. Policymakers, investors, and trading desks parse every phrase for the global audience.

The 2025 symposium theme, focused on labor dynamics and productivity, underscores longer-term structural forces shaping monetary policy. Demographic changes, AI transformations, and global trade adjustments form the backdrop to Powell’s balancing act.

A moment of legacy

For Powell, the speech may be as much about his standing as a policymaker as it is about immediate market impact. With political pressure looming and questions about succession, he faces the challenge of projecting stability while keeping options open.

Whether Powell leans hawkish, dovish, or opts for a poker face, the tone he strikes in Wyoming will echo through markets into the fall, shaping expectations not only for September but also for the Fed’s broader path ahead.